2018 (7) TMI 782 - AT - Service Tax

Tribunal allows CENVAT Credit for exported services, emphasizes nexus with output service

The Tribunal held that the denial of CENVAT Credit on input services related to exported output services was not justified. It found a clear nexus between ... CENVAT credit - various input services - denial on account of nexus - Held that:- The assessee is an exporter of taxable service and no output service has been provided by it to the service recipient located within the country. As such, it cannot be said that the disputed services have no nexus with the output service provided by the assessee. Since output service in question, was exported by the assessee, denial of CENVAT Credit benefit on the disputed input service, used/utilized therein, cannot be sustained in the eyes of law - credit allowed. CENVAT Credit - denial on the ground that the invoices do not reflect the address of the registered office of the assessee - Held that:- Since there is no mention or stipulation in the said statutory provision that the services have to be received in the registered premises only and not in other premises of the service receiver, the said plea taken by Revenue cannot be considered as proper for disallowing the legitimate CENVAT Credit to the assessee - credit allowed. Appeal dismissed - decided against Revenue. Issues:1. Denial of CENVAT Credit on input services related to exportation of output service.2. Validity of CENVAT Credit on services received at non-registered premises.Analysis:1. The appeal involved a dispute regarding the denial of CENVAT Credit on input services by both the Assessee and Revenue. The Assessee contended that the input service credit availed by it was connected to the exportation of output service, meeting the definition of input service under Rule 2(l) of Cenvat Credit Rules, 2004. On the other hand, Revenue argued that the credit taken on the input service was improper as the invoices of the service provider did not reflect the Assessee's registered address. The Tribunal examined the case records and found that while the denial of CENVAT benefit on certain services like hotel accommodation charges and catering services was justified, other services such as Consultation, Architects Service, Renting of DG Set, etc., had a clear nexus with the output service provided by the Assessee, which was exported. Therefore, the Tribunal held that the denial of CENVAT Credit benefit on the disputed input services used in providing the exported output service was not justified under the law.2. Regarding the issue of the validity of CENVAT Credit on services received at non-registered premises, the Tribunal addressed the Revenue's argument that the invoices did not reflect the Assessee's registered office address, questioning the propriety of availing CENVAT credit in such cases. The Tribunal referred to Rule 3, which mandates that input services should be received by the service provider. It noted that the rule does not specify that services must be received only at the registered premises of the service receiver. Therefore, the Tribunal rejected the Revenue's contention that the CENVAT Credit should be disallowed due to the lack of the registered office address on the invoices. Consequently, the Tribunal partly allowed the Assessee's appeal by denying CENVAT Credit on specific services while dismissing the Revenue's appeals.In conclusion, the Tribunal's judgment clarified the eligibility of CENVAT Credit on input services related to exported output services and emphasized that the lack of the registered office address on invoices did not invalidate the credit if the services were utilized for the business.