Cenvat credit on jointly addressed invoices was disallowed, but the extended limitation period and penalty failed for lack of suppression.

Cenvat credit on common input services was held inadmissible where invoices were issued to multiple separately registered entities but one entity first availed the full credit and later cross-charged it to the others, since the rules did not permit that sequence for the appellant alone. The extended period of limitation was held unsustainable because the credit was disclosed in ST-3 returns, there was no suppression or misdeclaration, and the notice arose from an audit objection; the related penalty was therefore also set aside. The demand survived only for the normal period with applicable interest, with limited reconsideration required for quantification.

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Issues: (i) Whether cenvat credit of service tax paid on common input services, where invoices were raised jointly in the names of multiple separately registered entities but the entire credit was initially taken by one entity and later cross-charged to the others, was admissible to the appellant; (ii) whether invocation of the extended period of limitation and the consequential penalty were sustainable.

Issue (i): Whether cenvat credit of service tax paid on common input services, where invoices were raised jointly in the names of multiple separately registered entities but the entire credit was initially taken by one entity and later cross-charged to the others, was admissible to the appellant.

Analysis: The credit was taken on invoices relating to renting, security, housekeeping and xerox services that were addressed to all the entities, each having separate registration. The rules did not support a procedure by which one entity could first avail the entire credit and thereafter cross-charge it to the others. On that reasoning, the entire credit could not be treated as admissible to the appellant alone.

Conclusion: The credit was held inadmissible to the appellant for the disputed invoices and services.

Issue (ii): Whether invocation of the extended period of limitation and the consequential penalty were sustainable.

Analysis: The credit availment was reflected in the ST-3 returns and the records did not disclose concealment, suppression or mis-declaration. The notice was issued only on the basis of an audit objection, and on those facts the extended period could not be invoked. Once suppression was not established, the penalty based on such allegation also could not survive.

Conclusion: The extended period of limitation was not sustainable and the penalty was set aside.

Final Conclusion: The demand survived only for the normal period with applicable interest, while the penalty failed, and the matter required limited reconsideration for quantification of the normal-period demand and interest.

Ratio Decidendi: Where credit is taken by one separately registered entity on invoices issued to multiple distinct entities, and the credit is later cross-charged without an enabling provision, the credit is not admissible; however, when availment is disclosed in statutory returns and no suppression is shown, the extended period and suppression-based penalty cannot be sustained.

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