Cenvat credit of service tax on invoices issued to branch offices with centralized billing upheld; credit permitted on appeal

Cenvat credit of service tax where invoices were in branch office names but payment, billing and accounting were centralized at the registered premises; legal basis relied on parity with central excise credit precedents to permit input service credit despite invoices naming unregistered branches, because the registered assessee discharged service tax liability and payments originated from the registered establishment. Consequence: prior disallowance overturned and credit allowed with consequential relief.

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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.

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