Custom, Excise & Service Tax Tribunal
M/S. Actis Advisers Pvt. Ltd vs C.S.T. Delhi - Iv on 2 September, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH,
Date of Hearing: 06.08.2014
Date of decision: 02.09.2014
Appeal No. ST/52129/2014 & 52132/2014 - ST[SM]
[Arising out of Order-in-Appeal No.88/ST/Appeal/DLH-IV/2013, dt. 31.01.2013, passed by Commissioner Excise(Appeals)of Customs & Central - Raipur]
For approval and signature:
Honble Mr. Rakesh Kumar, Member(Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s. Actis Advisers Pvt. Ltd. Appellants
Vs.
C.S.T. Delhi - IV Respondent
Appearance:
Sh. Vaibhav Jain, Advocate - for the Appellants Ms. Shweta Bector, DR- for the Respondent CORAM:
Hon'ble Sh. Rakesh Kumar Member (Technical) FINAL ORDER NO: 53395-53396/2014 Per Rakesh Kumar:-
1.1 The appellant having their office at Mira Corporate Suites, Block D, Ground Floor, 1 & 2 Ishwar Nagar, New Delhi-110025, have taken service tax registration for Management Consultancy Services. They provide this service mainly to their overseas clients. They availed Cenvat Credit in respect of various input services used for providing their output service Management Consultancy Services to their clients. Since they could not utilize the accumulated Cenvat Credit in respect of input service for payment of service tax on their domestic transactions, in accordance with the Provisions of Rule 5 of the Cenvat Credit Rules,2004 read with Notification No.5/2006-CE(NT) dt. 14.03.06, they filed claims for cash refund of Rs.12,20,506/- of the accumulated Cenvat Credit Jan10 to March10 quarter and another refund claim for an amount of Rs.32,54,141/- for Oct.09 to Dec.09 quarter. The Jurisdictional Assistant Commissioner by two separate orders sanctioned refund of Rs.11,89,402/- out of claimed amount of Rs.12,20,806/- and sanctioned refund of Rs.32,54,077/- out of the claimed amount of Rs.32,54,141/-. The quantum of refund was determined by taking into account the total Cenvat Credit taken during the quarter and ratio of the appellant export turnover to their total turnover. However, in both the cases the Assistant Commissioner ordered adjustment of interest on wrongly taken Cenvat Credit which was to be adjust against the refund claims. In the refund claim for Jan.10 to March10 period where the Assistant Commissioner sanctioned an amount of Rs.11,89,402/-, he ordered recovery of interest of Rs.81,080/- of wrong Cenvat Credit and accordingly issued a cheque for balance amount of Rs.11,07,601/- and similarly in respect of the refund claim for Oct.09 to Dec.09 period for which the refund of Rs.32,54,077/- was sanctioned, he ordered interest recovery of Rs.2,74,258/- for wrong Cenvat Credit and accordingly issued a refund cheque for an amount of Rs.29,70,819/-. The interest was charged on the ground that certain amount of Cenvat Credit has been taken on the basis of the service providers invoices, while during that period they did not have service tax registration and that they became eligible for Cenvat Credit on the basis of those invoice only on the date the Delhi office of the appellant obtained Centralized registration.
1.2 On appeals being filed to Commissioner (Appeals) against this order of the Assistant Commissioner, the same were dismissed. Against the orders of Commissioner(appeals), these two appeals have been filed.
2. Heard both the sides.
3. Sh. Vaibhav Jain, learned counsel for the appellant, pleaded that there is no dispute about receipt of the services in respect of which Cenvat Credit has been taken, that Cenvat Credit cannot be denied just because during the period when the service were received, the appellant had not taken Centralized Registration at Delhi, that the Tribunal in the case of C. Metric Solution Pvt. Ltd. Vs. CCE, Ahmadabad, reported in 2012(28) STR-460 (Tri. Ahmd.) relying upon its earlier decision in case of Well Known Polyesters Ltd. Vs. CCE reported in 2012(25) STR-411 (Tri. Ahmd.) has held that Cenvat Credit in respect of inputs/input servics received by output serviced provider prior to his obtaining service tax is admissible and denial of Cenvat Credit on the ground that at the time of receipt of the inputs/input services by the output service provider, he had not taken registration, is not correct and that in view of the above submissions, the impugned orders are not sustainable.
4. Ms. Shweta Bector, learned DR, defended the impugned orders by reiterating the findings of the Commissioner (Appeals) and emphasized that unless an assessee has service tax or Central Excise Registration, he would not be eligible for Cenvat Credit in respect of input services or inputs received during that period, even if later on he obtains the registration. She, therefore, pleaded that for the period for which there was no registration, the Cenvat Credit was wrongly taken and the interest on the wrongly taken credit has been correctly charged for the period till the date on which centralized registration certificate was issued to the Appellant and accordingly there is no infirmity in the impugned order passed by the Commissioner (Appeals).
5. I have considered the submissions from both the sides and perused the records. The only point of the dispute in both the appeals is as to whether during the period when appellant office was not registered, they could take Cenvat Credit in respect of the input service received during that period. There is no dispute that the earlier the appellants Bombay branch had service tax registration and subsequently when the Delhi branch started operating, for some period there was no separate registration till the centralized registration was obtained in respect of Delhi branch. There is no dispute about the receipt of the services. The Tribunal in case of C. Metric Solution Pvt. Ltd. (Supra) and C. Metric Solution Pvt. Ltd. (Supra) has held that in clear terms that Cenvat Credit in respect of inputs/input services received by an output service provider during period prior his obtaining service tax registration is admissible and denial of Cenvat Credit on the ground that at the time of receipt of inputs/input services by a output service provider, there was no registration with the Central Excise, is not correct. In view of these judgments of the Tribunal, there is no irregularity in the Cenvat Credit taken by the appellant and since the Cenvat Credit has been correctly taken in respect of the services received prior to registration, there is no question of charging of interest for wrong Cenvat Credit. The interest demands are, therefore set aside and the impugned order stands modified to this extent. Both the appeals stands disposed of as above.
[Order pronounced in the open court on 02.09.2014] (Rakesh Kumar) Member (Technical) S.Kaur 1