2024-VIL-1662-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Cenvat Credit, Nexus, ISD Registration, Photocopies of Invoices – Demand on account of Cenvat credit availed on various services on grounds such as lack of nexus with manufacturing activity, ineligibility of documents for availing credit, and non-compliance with ISD registration requirements - Whether the credit on "Business Support Service" is eligible, when the arrangement between the appellant and its sister concern was merely for sharing of common expenses and not for provision of any taxable service - HELD - When the service provider has paid service tax on the amount recovered from the appellant and the department has accepted such payment, the credit cannot be denied at the recipient's end merely on the ground that there was no provision of service - Tribunal relied on the decision in the case of Amara Raja Electronics Ltd., wherein it was held that once the service tax is paid by the service provider, the credit cannot be denied at the recipient's end on the allegation that no service was provided - it is now settled law irrespective of the fact whether or not the impugned service was eligible to Cenvat Credit in any matter where the question involved is whether or not the impugned service/ inputs were liable to tax, if the tax paid by the service provider/ supplier of inputs, is not questioned at the end of service provider/ supplier of inputs, the same cannot be challenged at the recipient’s end - the impugned order is set aside on this issue - Whether the credit on "Management Consultancy Service" is eligible, when the credit was claimed based on photocopies of invoices and invoices issued to the Bangalore unit - HELD - Credit cannot be denied merely on the ground that the invoices were in the name of the Bangalore unit or were photocopies, as long as the services were availed by the Ahmedabad unit - Tribunal relied on the decisions in Parekh Plast (India) Pvt. Ltd. and Modern Petrofils, wherein it was held that the credit cannot be denied when the invoices are in the name of the Head Office, as the services have been utilized by the Ahmedabad unit - There is no allegation in the impugned order that the impugned services were not eligible for Cenvat credit. The credit cannot be denied to the appellant merely for the reason that the GAR -7 challan is in the name of Bangalore unit, which is also their head office - Whether the credit on "Guest House Service" is eligible, when the guest house was used for the stay of visiting engineers, consultants, and experts - HELD - The credit on guest house services is eligible, as the same has a clear nexus with the business activity of the appellant. The Tribunal distinguished the case of residential colonies for employees, and relied on the decision in Associated Capsules P. Limited, wherein it was held that the guest house services used for visiting professionals are eligible for Cenvat credit - Credit availed on invoices with different address - HELD - Some of the invoices have been raised in the name of units which are their sister concerns but have different identity. Accordingly, it is held that only invoices which are in their own name or their Bangalore Head Office are eligible for Cenvat credit. Cenvat Credit on other invoices is disallowed. The appellant will produce the necessary documents for verification. The Cenvat credit taken against the invoices which do not pertain to them, or their head office cannot be considered to be bonafide and accordingly, the appellant will also pay the applicable interest and equal penalty under Section 78 of the Finance Act, 1994 - Cenvat credit on Outdoor catering Service - HELD - The appellant has engaged services of outdoor catering to their employees and submitted that as their factory is located 35 km away from the city and there are no eating arrangements around factory area and hence they availed the service of outdoor catering to provide food to the employees. However, the Cenvat credit on these services was denied on the ground that the services provided was only a welfare activity and no nexus to the manufacturing activity – in the appellant’s own case at Bangalore, the matter has been decided in their favour. The impugned order is accordingly, set aside on this ground - Cenvat Credit on Commercial or Industrial Construction Service – HELD - The appellant has already reversed the demand confirmed in the order. However, the appellant will be required to pay the interest applicable under Section 75 and penalty under Section 78 of the Finance Act, 1994 if not paid earlier - Credit on Real Estate Service – HELD - The matter has already been decided in favour of the assessee by CESTAT Mumbai bench in the case of DBOI Global Services Pvt Ltd holding that real estate services for leasing renting etc. are related to business activities - the impugned order set aside on this ground.
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