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2020 (4) TMI 72 - AT - Central ExciseCENVAT Credit - input services - GTA service - Manpower service - legal service received by the appellant - period January, 2016 to September, 2016 - HELD THAT - The appellant company admittedly is having only one factory and their Head Office is located at Delhi, having a common registration under centralised registration scheme. There is no question involved of distribution and thus, the appellant is not required to be registered as an ISD for its Head Office - Admittedly, services of GTA and Manpower Supply Agency Service have been received only for the sake of accounting at Head Office, there can be no disallowance. In view of the common registration number under the centralised registration scheme, the impugned order is not maintainable and also suffers from mistake of facts and mistake of law. Appeal allowed - decided in favor of appellant.
Issues Involved:
Disallowance of cenvat credit of service tax on input services like GTA, Manpower service, and legal service received by the appellant for the period January 2016 to September 2016. Analysis: 1. Issue of Disallowance of Cenvat Credit: - The case involved the disallowance of cenvat credit of service tax on input services like GTA, Manpower service, and legal service received by the appellant for a specific period. - The appellant, a manufacturing company, was observed to have obtained service tax registration for its factory, subsequently amended to include the Head Office and additional services. - The appellant availed cenvat credit based on challans/invoices paid by the Head Office without registering it as an 'Input Service Distributor' (ISD), leading to a demand notice and penalty. - The Commissioner (Appeals) rejected the appeal, stating that services were used at the manufacturing unit and the legal service at the Head Office, emphasizing the necessity of services being received and used at the factory for cenvat credit eligibility. - The appellant argued that GTA and Manpower services were received at the factory, with payment facilitated by the Head Office for convenience, as the appellant had only one manufacturing unit in Rajasthan. - The Tribunal found that the appellant had a common registration under the centralised registration scheme, indicating no need for ISD registration for the Head Office, and allowed the appeal, setting aside the impugned order. 2. Centralized Registration Scheme and Cenvat Credit Eligibility: - The Tribunal noted that the appellant had a single factory and a Head Office with a common registration, eliminating the need for ISD registration. - Services like GTA and Manpower, though paid for at the Head Office, were received for accounting purposes, with no distribution of input credit involved, as the appellant was a manufacturing company, not an output service provider. - The Tribunal emphasized the common existence of the factory and Head Office under the Service Tax Rules, supported by the centralised registration certificate, leading to the conclusion that the impugned order was not sustainable due to factual and legal errors. - Consequently, the Tribunal allowed the appeal, setting aside the order and granting the appellant consequential relief as per the law. In conclusion, the Tribunal's judgment resolved the issue of disallowance of cenvat credit by recognizing the appellant's single factory and Head Office under a common registration, thereby establishing the eligibility for cenvat credit without the need for ISD registration. The decision provided clarity on the application of cenvat credit rules in cases involving centralized registrations and input services received at different locations within the same legal entity.
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