Tribunal allows appeal, rejects ineligibility claim for credit on services at unregistered premises

The Tribunal allowed the appeal, concluding that there is no statutory provision mandating input services to be received at registered premises under the Cenvat Credit Rules. The Tribunal rejected the Revenue's claim of ineligibility of Cenvat credit for services received at unregistered premises, citing a precedent and emphasizing the lack of such a restriction in the rules. Additionally, the Tribunal addressed the issue of repeated adjournments, highlighting the negative impact on justice delivery and denying further delays in line with the Supreme Court's stance on timely trial access.

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Issues Involved:
1. Admissibility of Cenvat credit on input services received at unregistered premises.
2. Requirement of receiving input services at registered premises as per Rule 3(1) of the Cenvat Credit Rules, 2004.
3. Repeated adjournments and their impact on justice delivery.

Issue-wise Analysis:

1. Admissibility of Cenvat credit on input services received at unregistered premises:
The primary issue in this case revolves around the admissibility of Cenvat credit on services used at storage premises outside the manufacturing premises, which were unregistered. The appellant stored duty-paid excisable goods in these unregistered godowns adjacent to the customer's plant. The Revenue contended that the services availed at these unregistered premises, such as godown rent, unloading, loading, freight, painting, and other miscellaneous expenses, were post-manufacture and after-sale activities beyond the place of removal and had no nexus with the manufacturing activities. Consequently, a show cause notice was issued to recover the ineligible Cenvat credit amount of Rs. 12,17,807/- along with interest and penalty.

2. Requirement of receiving input services at registered premises as per Rule 3(1) of the Cenvat Credit Rules, 2004:
The Tribunal examined whether Rule 3(1) of the Cenvat Credit Rules, 2004 mandates that input services must be received at the registered premises of the appellant. The Tribunal noted that Rule 3(1) requires the receipt of inputs and capital goods in the premises of the manufacturer or provider of output services but does not explicitly mandate that input services must be received at the registered premises. The Tribunal cited the case of Pangea 3 Legal Database Systems Pvt Ltd, where it was held that the appellant is entitled to Cenvat credit for input services received at premises other than the registered premises. This decision was upheld by the Hon'ble High Court of Allahabad, which ruled that there is no statutory provision in the Cenvat Credit Rules imposing such a restriction. Therefore, the Tribunal concluded that the case made out by the Revenue could not be sustained.

3. Repeated adjournments and their impact on justice delivery:
The Tribunal addressed the issue of repeated adjournments sought by the appellant's counsel. Despite multiple adjournments granted over three years, the appellant's counsel continued to request further delays. The Tribunal referenced the Hon'ble Apex Court's observations in the case of Ishwarlal Mali Rathod vs Gopal & Others, condemning the practice of seeking repeated adjournments and the mechanical granting of the same by courts. The Apex Court emphasized that such delays affect the litigant's right to access to justice and timely trial, ultimately shaking the trust and confidence of litigants in the justice delivery system. The Tribunal, adhering to this principle, denied the request for further adjournment and proceeded to hear the case.

Conclusion:
The Tribunal found that there is no requirement in the Cenvat Credit Rules that input services must be received at registered premises. Consequently, the Tribunal could not uphold the impugned order denying Cenvat credit on the basis of the services being received at unregistered premises. The appeal was allowed, and the order pronounced in the open court.

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