CESTAT allows CENVAT credit for warehouse rental services and invoices with head office addresses under Rule 4

CESTAT Ahmedabad allowed the appeal, holding that the six-month limitation for CENVAT credit under Rule 4's 3rd Proviso applies only to invoices issued after 18.09.2014, not prior ones. The tribunal ruled that CENVAT credit for warehouse rental services outside factory premises is admissible if related to manufacturing activities. Additionally, credit cannot be denied merely because invoices bear head office address instead of factory address, provided services were actually received at the factory. The impugned order was set aside and all disputed credits were allowed to the appellant.

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Issues Involved:

A) Applicability of the six-month limitation for availing Cenvat credit to duty-paying documents issued prior to 18.09.2014.

B) Eligibility of Cenvat credit for renting immovable property services for a warehouse located outside the factory.

C) Denial of Cenvat credit based on invoices addressed to the head office, not in accordance with Rule 9(1) of the Cenvat Credit Rules, 2004.

Issue A:

The Tribunal considered whether the six-month limitation for availing Cenvat credit, introduced by the 3rd Proviso to Rule 4 of the Cenvat Credit Rules, 2004, effective from 18.09.2014, applies to duty-paying documents issued before this date. The Tribunal concluded that the limitation does not apply to invoices issued prior to 18.09.2014. This conclusion was supported by several judgments, including Roquette Riddhi Siddhi Pvt. Ltd. v. CCE & ST, Belgaum, which stated that the six-month limitation is not retrospective. The Tribunal emphasized that the right to Cenvat credit accrues when the tax on inputs is paid, and this right cannot be retrospectively altered by subsequent amendments.

Issue B:

The Tribunal addressed whether Cenvat credit is available for renting immovable property services for a warehouse located outside the factory premises. The Tribunal held that such credit is admissible if the warehouse is used for storing raw materials, which is directly related to the manufacturing process. The Tribunal cited several judgments, including Saurashtra Cement Ltd., which established that services used in relation to the manufacture of final products are eligible for credit, regardless of whether the services are availed inside or outside the factory premises.

Issue C:

The Tribunal examined whether Cenvat credit can be denied if the invoice is addressed to the head office rather than the factory. The Tribunal found that credit cannot be denied solely on this basis, provided the input service was received and used by the factory. The Tribunal referenced several judgments, such as Madhya Pradesh Consultancy Organization Ltd., which clarified that the address on the invoice is not a valid ground for denying credit if the service was indeed received and utilized by the factory. The Tribunal emphasized that there is no requirement for the premises to be registered with the Service Tax Department for availing Cenvat credit.

Conclusion:

The Tribunal concluded that the appellant is entitled to Cenvat credit on all three issues. The impugned order was set aside, and the appeal was allowed.

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