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TMI Blog2023 (6) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... are sufficient document under Rule 4A and hence on that strength that itself they can take credit. ISD can be any office, where the invoices issued under Rule 4A are received and distributed. The invoices under Rule 4A of STR provides for issuance of a specific invoice bill or challan giving certain details etc. In fact, in the case of a bank company an invoice, a bill or challan, as the case may be, also includes any document by whatever name called, whether or not serially numbered and whether or not containing address of the person receiving taxable services but it should contain other information in such documents as required under the said subrule. Whether the debit advice/invoice issued by the banks to their office in Hyderabad, can be considered as an eligible documents issued under the provisions of Rule 4A or otherwise? - HELD THAT:- It is a case where there is no need for any ISD distribution and the only issue which needs to be decided is whether the invoice/advise raised by the banks are sufficient to allow the Gumpam unit to take the credit - It is undisputed fact that such imports have taken place with reference to Gumpum unit only and the input service in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of their having not been used in relation to the manufacture of the final product. The remaining credit is to be allowed. The interest and penalty applicable under section 15(2) of CCR 2004 read with Section 11AC (1)(c) of Central Excise Act 1944 would also be applicable on such ineligible credit. Construction Service - HELD THAT:- It is clearly not admissible and so to that extent the amount of Rs. 1,05,424/- out of total demand of Rs. 13,01,140/- as confirmed by the Original Authority and also upheld by Commissioner (Appeals) needs to be upheld. Thus, the extent of demand on account of credit of ineligible service i.e. construction service, the Order of Original Authority and Commissioner (Appeals) is upheld and for remaining amount of demand, the order is set aside for the purpose of redetermination of admissible credit. Extended period of limitation - HELD THAT:- Since the admitted fact is that they have not correctly followed the procedure for clearing inputs on which credit was taken, as also the fact that appellant have not come out clean before the Department with all the relevant facts before the audit, it is not found, that sufficient grounds have been brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions for distribution as stipulated in Rule 7 of Cenvat Credit Rules, 2004. Thus, their head office has contravened Rule 4A of Service Tax Rules as well as Rule 7 of CCR 2004 in as much as they have passed on the credit to manufacturing unit on the basis of invoices issued by the service provider and not by way of ISD challan. It was also alleged that they had taken ineligible credit in respect of certain ineligible services provided by M/s M. Varalakshmi, which was in the nature of construction services and hence excluded from the purview of input service in terms of Rule 2(l) of CCR 2004. 4. The Original Adjudicating Authority, interalia, held that the appellant has not followed the procedure for distributing the input service tax credit in view of Rule 9(1)(g) of CCR 2004 as well as Rule 7. The Original Authority held that invoice and bank challans were issued in the name of their head office situated at Banjara Hills, Hyderabad, but the service tax paid thereon was not properly distributed and the whole credit was wrongly availed by only one unit i.e. at Gumpam. On the issue of availing credit on construction services, he noted that it was on account of ineligible se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs, even though the debit advice/ invoice issued by the bank mentioning their Hyderabad office, have been taken by them. They have submitted some sample copies of Bill of Entries in respect of their claim. They have also relied on certain judgments in respect of their claim that they have rightly availed the credit in respect of bank charges on the strength of invoices issued by the banks. A number of cases have been relied by the appellants in defence of their claim for rightfully taking the credit at Gumpum unit including the followings, i) Action Construction Equipment Pvt Ltd., Vs CCE, Delhi-IV [2015 (326) ELT 731 (Tri-Del)] ii) Laxmi Organic Industries Ltd., Vs Commissioner of Central Excise, Raigad [2018 ACR 680 CESTAT Mumbai] iii) Sanghi Industries Ltd., Vs CCE, Rajkot [2014 (2) TMI 278 CESTAT-Ahmedabad] iv) CC E Vapi Vs DNH, Spinners [2009 (16) STR 418] v) Hindustan Zinc Ltd., Vs CC CE, Jaipur-II [(2013) 2012 (3) TMI 367 CESTAT NEW DELHI] vi) CCE, Surat-III Vs Creative Enterprises [2009 (235) ELT 785 (Guj)] vii) CCE Vs Dashion Ltd., [2016 (41) STR 884 (Guj)] The appellant also submitted that, as the availment of credit was duly reflecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he raw material at their Gumpam Unit as is evident from the Bill of Entry in respect of which payments including bank charges have been incurred by their liasoning office at Hyderabad on their behalf. The service tax paid on such bank charges were also evident from the debit advice/invoices raised by the banks even though the same was raised on their Hyderabad liasoning office, but the fact remains that it was with respect to the raw materials actually imported by them at their Gumpam Unit only. Therefore, merely because such invoices, challans etc., issued by the bank, is not showing the name or address of their unit or location, which is otherwise co-relatable from the some other documents, they cannot be denied the substantive credit merely because of that omission. 11. In order to examine whether it is a case of transfer of credit by ISD or it is a case of taking of credit on the strength of invoice not having the name of the concerned unit/recipient, the provisions of Rule 9(1)(g) and Rule 7 of CCR need to be seen. As per Rule 9(1), the cenvat credit can be taken by the manufacturer on the basis of certain documents like invoices, bill or challan etc. It can also be taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subrule. 14. Therefore, now what is to be considered is whether the debit advice/invoice issued by the banks to their office in Hyderabad, can be considered as an eligible documents issued under the provisions of Rule 4A or otherwise. On going through the challans it is obvious that all the relevant details required for issuing the challan under Rule 4A of Service Tax Rules 1994 has been complied with by the concerned bank, which clearly shows the amount of service tax paid, nature of service and also their service tax registration number. However, the next question would be whether such debit advise issued by the banks can be considered as an eligible documents under Rule 4A for the purpose of taking credit by the Gumpam unit under Rule 9(1) of CCR even though the name mentioned on the debit advice is that of their Hyderabad office and not that of the Gumpam unit. The appellants have meticulously explained the co-relation between the Bill of Entry under which they had received the raw materials and the banking charges paid for such imports. Therefore, it is a case where there is no need for any ISD distribution and the only issue which needs to be decided is whether the invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ISD registration or its distribution in accordance with the prescribed Rules, since it has been observed that there was no need for the liason office at Hyderabad to act as an ISD and follow the required procedure, the case laws cited are not relevant. 17. There is, however, another aspect which also needs to be addressed. It is admitted fact that the Gumpam unit has been stock transferring some of their raw materials imported by them originally to their other units after taking credit. They were apparently following procedure under Rule 3(5) for clearing the raw materials as such, however, they were paying duty instead of reversing credit. Therefore, the issue is whether they are entitled to take the credit to the extent they have not used such services or raw material in or in relation to manufacture of final product within their factory at Gumpum. The provisions under CCR provides for clearance of input or capital goods as such by reversing the credit taken originally on such inputs or capital goods. It is admitted that this provision has not been adhered to in the instant case, as the inputs were being cleared on stock transfer basis on the payment of central excise dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r distribution in accordance with the procedure prescribed under the respective rules. On the other hand, the unit Gumpam is eligible to take credit on the strength of the debit advice/invoices issued by the banks clearly showing the payment of service tax in respect of Bill of Entry, under which the inputs were received at their Gumpam unit and the service i.e. banking charges on the import of raw material, which is an eligible service for taking credit. To that extent, they are entitled to take credit. However, this taking of credit is subject to the fundamental rule under CCR that the same must be used in manufacturing of the final product by said manufacturer or for provision of service. Here admittedly there has been stock transfer of such inputs on which they had taken credit initially and even though, they have paid central excise duty on the same, it cannot be considered as a method for reversing the credit for clearance of input as such. And to that extent, the inputs not used at Gumpum Unit cannot be considered to have been used in their factory. Accordingly, to that extent, they would not be entitled for credit. However, the co-relation of the invoice/challans issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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