2016 (12) TMI 1455 - AT - Central Excise

Appeal allowed for credit on input services; procedural irregularity not a bar to availing credit

Commissioner of Central Excise, Nagpur Versus M/s Ultratech Cement Ltd.

The Tribunal allowed the appeal, ruling that the credit availed by the appellant for services received at various offices qualified as input services. The ... CENVAT credit - input service distributor - denial on the ground that ISD could avail credit only in respect of input services received at its own address - Held that: - I find that the Pune marketing office of the appellant is registered as ISD and it was availing credit of various services availed by marketing office located at Aurangabad, Ahmednagar, Jalgaon, Nasik, Beed etc - It can be seen that sales promotion, marketing research are specifically covered in the inclusive part of the definition of input. In these circumstances, the credit availed by the appellant in the various offices would qualify as input service. Whether the credit can be availed if the documents are not addressed to the ISD but to its offices not registered as ISD? - Held that: - I find that the input services received by the respondent are entitled to be taken credit. It is not restricted to the input services received by the respondent at their factory. Input services received by the appellant at its Head Office or other offices are also eligible for credit and the facility of ISD has been granted to facility taking of such credit. Reliance was placed in the decision of the case of Doshion Ltd. [2012 (10) TMI 952 - CESTAT AHMEDABAD], where it was held that The omission to take registration as an Input Service Distributor can at best be considered as procedural irregularity, credit available. Credit allowed - appeal allowed - decided in favor of appellant. Issues:1. Availing credit distributed by Input Service Distributor (ISD) for services received at various offices.2. Interpretation of the definition of 'input service' under the law.3. Applicability of ISD registration for availing credit of services.Issue 1: Availing credit distributed by ISD for services received at various officesThe respondent, M/s Ultratech Cement Ltd., availed credit distributed by their Pune marketing office registered as Input Service Distributor (ISD) for services received not only by the ISD but also by its offices located at various places. A show-cause notice was issued alleging that credit of offices located at various places cannot be distributed by the ISD. The dispute revolved around whether the credit of services received at various offices could be availed through the ISD.Issue 2: Interpretation of the definition of 'input service'The definition of 'input service' was crucial in determining the eligibility of the services availed by the appellant. The argument centered on whether the services received at various marketing offices located at different stations qualified as eligible input services under the law. The inclusive part of the definition specifically covered services like sales promotion and marketing research, which were availed by the marketing offices in question.Issue 3: Applicability of ISD registration for availing credit of servicesThe key contention was whether the services received by the various offices, not registered as ISD, could still qualify as input services for availing credit through the ISD. The Tribunal analyzed past decisions and observed that the facility of ISD allowed for the taking of credit for services received at Head Office or other offices, not just at the factory. The absence of ISD registration at the offices receiving services was considered a procedural irregularity rather than a bar to availing credit.The Tribunal referred to precedents such as the case of Doshion Ltd., where procedural irregularities in ISD registration were overlooked, especially when no extra benefit was gained and there was no loss to the Revenue. Following the principles laid down in such cases, the Tribunal allowed the appeal, emphasizing that the input services received by the respondent were entitled to be taken credit, irrespective of the specific address on the documents.In conclusion, the Tribunal held that the credit availed by the appellant for services received at various offices qualified as input services, and the procedural irregularity of ISD registration at those offices did not invalidate the credit availed. The decision was in line with past judgments and principles of revenue neutrality.