2026-VIL-336-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax – Denial of Cenvat Credit on the ground that its zonal office, which was located in the same premises, was not registered as an Input Service Distributor (ISD) – HELD - There is no dispute regarding the payment of the service tax in respect of which the credit has been availed nor is the eligibility of such services as input services being disputed. In such circumstances, when it also remains an uncontroverted fact that both the zonal office and the appellant main branch are located in the same building, and administratively when the entire financial requirements of the said zonal office, was being borne by the appellant main branch with the zonal office stated to be having no separate financial transactions or books of accounts, in accordance with the well settled position in law that substantial benefit cannot be denied for technical or venial breaches - The substantial benefit of Cenvat credit cannot be denied for a mere procedural infraction of non-registration of the zonal office as an ISD, especially when the appellant was in possession of invoices with all the requisite details for availing the credit and there was no dispute regarding the eligibility of the input services or the payment of service tax. The denial of Cenvat credit on this ground was unsustainable and set aside - The impugned order is set aside and the appeal is allowed - Restriction of Cenvat Credit on Exempted Services - The show cause notice is bereft of any details or evidence regarding the exempted services provided by the appellant. The appellant had also provided evidence showing that it had not availed the service tax exemption notification. The allegation regarding wrongful utilization of Cenvat credit is unsustainable, as the Department had failed to substantiate the claim of the appellant providing exempted services - There was no evidence of any deliberate or positive act with an intent to evade payment of duty on the part of the appellant, a public sector bank, and hence the invocation of the extended period and imposition of penalty is also unsustainable.
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