Tribunal grants Cenvat credit for Visakhapatnam unit services despite Hyderabad unit mention

The tribunal allowed the appeal, granting the appellant entitlement to Cenvat credit for services used in the Visakhapatnam unit. It held that since no credit was claimed for these services in the Hyderabad unit, the appellant could avail the credit for the Visakhapatnam unit despite challans mentioning details of the Hyderabad unit. The tribunal emphasized substantial compliance with Rule 9(1)(e) of CCR 2004, setting aside the previous order and providing relief to the appellant.

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Issues:
1. Entitlement to Cenvat credit in Visakhapatnam unit for services rendered.
2. Interpretation of Rule 9(1)(e) of Cenvat Credit Rules (CCR) 2004.

Analysis:

Issue 1: Entitlement to Cenvat credit in Visakhapatnam unit for services rendered:
The appellant, a manufacturer of Oxalic Acid with plants in Hyderabad and Visakhapatnam, paid service tax under reverse charge mechanism for GTA services in Hyderabad only, despite services being utilized in both plants. The appellant argued that they were under the impression that separate service tax registration for the Visakhapatnam unit was not required. The revenue contended that Cenvat credit cannot be claimed as the challans mentioned details of the Hyderabad unit only. The appellant clarified that no Cenvat credit was availed in the Hyderabad unit for services rendered in Visakhapatnam. The tribunal found that services were used in the Visakhapatnam unit, and since Cenvat credit was not claimed by the Hyderabad unit for these services, the appellant was entitled to Cenvat credit for the Visakhapatnam unit.

Issue 2: Interpretation of Rule 9(1)(e) of CCR 2004:
The departmental representative argued that Cenvat credit can only be availed based on documents specified in Rule 9 of CCR 2004, particularly citing Rule 9(1)(e) which requires a challan evidencing payment of service tax by the service recipient. In this case, the appellant's Visakhapatnam unit was the service recipient, but the service tax was paid by the Hyderabad unit. The tribunal acknowledged the irregularity but emphasized that both units were part of the same corporate entity. Despite the challans indicating details of the Hyderabad unit, the services were utilized in the Visakhapatnam unit, and no Cenvat credit was claimed by the Hyderabad unit for these services. Consequently, the tribunal concluded that there was substantial compliance with Rule 9(1)(e) and allowed the appellant's claim for Cenvat credit in the Visakhapatnam unit.

In conclusion, the tribunal allowed the appeal, setting aside the impugned order and granting consequential relief to the appellant, emphasizing the substantial compliance with Rule 9(1)(e) of CCR 2004 and the entitlement to Cenvat credit for services utilized in the Visakhapatnam unit.

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