Appeal allowed: Cenvat credit granted for pipeline, inspection services, correction of input service zone.

The appeal was partially allowed, modifying the Commissioner (Appeals) order to grant Cenvat credit on tax paid for laying pipelines for inward transmission of CNG, services for inspection at new sites, and credit on input services mistakenly taken at Zone I instead of Zone II. The appellant's claims were accepted based on established judicial precedent, and the judgment was pronounced on 16-4-2021.

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Issues: Denial of Cenvat credit on tax paid for laying of pipeline, credit on input services mistakenly taken at different zones, services for inspection at new sites, and free medical check-up under CSR Scheme.

1. Denial of Cenvat credit for laying of pipeline:
The appellant contested the denial of Cenvat credit on tax paid for laying pipelines for inward transmission of CNG. The Tribunal referred to a previous decision in the appellant's favor and extended the benefit of credit for the service tax paid for laying pipelines used for inward transmission of natural gas. The appellant's claim was accepted based on established judicial precedent.

2. Credit on input services taken at different zones:
The issue of credit on input services mistakenly taken at Zone I instead of Zone II was examined. The Tribunal noted that the appellant had registered under the Centralized Registration Scheme, and separate registration was required under each jurisdiction. As the appellant had transferred the credits between zones in compliance with the requirements, the denial of credit based on technical grounds was deemed unjustified. Consequently, the credit on input services pertaining to Zone II was allowed to the appellant.

3. Services for inspection at new sites:
The dispute regarding the denial of Cenvat credit on input services availed for inspection at new sites was analyzed. The appellant argued that inspection was a mandatory requirement for gas distribution operations as per regulatory board notifications. The Tribunal disagreed with the department's view, emphasizing that the feasibility study and approval were prerequisites for operating the gas distribution network, not akin to setting up a factory. The appellant was deemed entitled to avail the credit on tax paid for inspection services at the site/locality.

4. Free medical check-up services under CSR Scheme:
The denial of credit for services related to free medical check-ups for drivers under the CSR Scheme was addressed. The appellant claimed Cenvat credit based on corporate social responsibility. However, as there was no evidence to demonstrate that the services were provided to all CNG drivers, irrespective of their source of CNG consumption, the Tribunal upheld the decision that the appellant was not entitled to the Cenvat credit for such services.

Conclusion:
The appeal was partially allowed, modifying the Commissioner (Appeals) order to allow Cenvat credit on tax paid for laying of pipeline of inward transmission of CNG, services for inspection at new sites, and credit on input service mistakenly taken at Zone I that pertains to Zone II. The judgment was pronounced on 16-4-2021.

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