2009 (10) TMI 434 - AT - Service Tax

Centralized billing and accounting for advertising services: claim of Cenvat/Service Tax credit on unregistered branch invoices allowed, denial set aside

Dominant issue: whether an assessee with centralized billing and accounting may claim cenvat/Service Tax credit on invoices issued in the names of ... Cenvat Credit of Service tax - payment of interest - centralized accounting system and centralized billing - Whether the service provider (the appellant), in these cases can avail credit of Service tax paid as input service on the invoices issued in the name of their own branch offices. - HELD THAT:- It is undisputed in this case that the appellant is not having any Service tax registration, in respect of branch offices on whose name the invoices were issued by the service provider. It is also not disputed that the appellant has got centralized billing and centralized accounting system at Manipal Rule 4 of Service Tax Rules Provides for an assessee to get himself registered as Service tax provider. It is seen that in this case the appellant had taken registration under the category of service provider of advertising services. There is no dispute that the branch offices are not registered with the Service tax authorities and they are not discharging the Service tax liability, obviously, as the appellant is discharging Service tax liability on the services provided by branches. We find that the document on which the appellant has taken the Service tax credit, though in the name of branch office are actually being paid from the premises wherein the Service tax registration has been taken, We find that the ratio of the decision of the Tribunal in the case of Stadmed Pvt. Ltd. [1997 (6) TMI 224 - CEGAT, CALCUTTA] and Gujarat Heavy Chemicals Ltd. [2005 (6) TMI 177 - CESTAT, MUMBAI] though being delivered in respect of Cenvat/modvat credit on the Central Excise duty, it squarely applies to the case in hand. Thus, the impugned order is unsustainable and we set aside the same and allow the appeal with consequential relief if any. Issues: (i) Whether a service provider having centralized billing and centralized accounting and registered at the centralized premises can avail Cenvat credit of service tax paid on invoices addressed to its branch offices.Analysis: The question turns on the interaction between the registration option for premises with centralized billing or accounting under Rule 4(2) of the Service Tax Rules, 1994 and the entitlement to Cenvat credit under the Cenvat Credit Rules, 2004, including the definition of input service. The appellant had centralized billing and accounting at the Manipal premises and had taken service tax registration at that premises. The invoices on which credit was claimed were addressed to branch offices that were not separately registered; payments were made from the registered centralized premises. The rules permit an assessee, at its option, to register the premises where centralized billing or accounting systems are located. Prior Tribunal decisions addressing analogous central excise Cenvat credit issues were applied by analogy to service tax credits where invoices addressed to branch offices were accepted when the registered centralized premises discharged the tax liability and payments originated from the registered premises.Conclusion: The appellant is entitled to avail Cenvat credit of service tax paid on invoices addressed to branch offices where the assessee has centralized billing and accounting and is registered at the centralized premises; the impugned demand is set aside in favour of the assessee.Ratio Decidendi: Where an assessee is registered at premises from which centralized billing or centralized accounting is carried out and the service tax liability is discharged from those registered premises, Cenvat credit on service tax paid may be availed even if invoices are addressed to branch offices not separately registered.