Custom, Excise & Service Tax Tribunal
M/S Punjab National Bank vs C.C.E., Meerut I on 18 June, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-III Date of hearing/decision: 18.6.2013 Service Tax Appeal No.2765 of 2012 Arising out of the order in appeal No.48-ST/MRT-I/2012 dated 11.5.2012 passed by the Commissioner (Appeals), Customs, Central Excise & Service Tax, Meerut I. For Approval and Signature: Honble Mr. Rakesh Kumar, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of 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 Punjab National Bank .. Appellant Vs. C.C.E., Meerut I . Respondent
Appearance:
Shri Ankur Jain, Advocate for the appellant Ms. Ranjana Jha, A.R. (Jt.CDR) for the respondent Coram: Honble Mr. Rakesh Kumar, Technical Member Final Order No.56714/2013 Per Rakesh Kumar:
The appellant are the Zonal Audit Office at Meerut of the Punjab National Bank. The appellant applied and obtained service tax registration for providing banking and financial services on 30.10.2004. However, the Appellant audited the records of different branches of PNB within their jurisdiction. Each branch was also having separate service tax registration. With effect from 7.6.2005, the concept of input service distributor (ISD) was introduced by amendments to Service Tax Rules, 1994 and Cenvat Credit Rules, 2004. Under this scheme when the head office of a company providing taxable service is located at a particular place and taxable services are provided by branches located at different places, the head office could avail the cenvat credit on the basis of invoices issued in its name and thereafter, distribute the credit to various branches, by issuing ISD invoices. As per the Rules framed in this regard, an input service distributor was required to obtain registration ISD. However, in this case, during the period from January 2008 to March 2009, the appellant though having service tax registration, were not registered as input service distributor, but they took cenvat credit of Rs.1,24,232/- on the basis of invoices of various service provider issued in the name of Zonal office and distributed the same to various branches by issuing the invoices. The Department issued a show cause notice to the appellant for recovery of this credit on the ground that when the appellant were not registered as input service distributor , they could not have taken the credit and distributed the same by issuing invoices to their branches. Subsequently, the Assistant Commissioner confirmed the cenvat credit demand and imposed of equal amount. On appeal being filed by the appellant, this order of the Assistant Commissioner was upheld by the Commissioner (Appeals). Hence this appeal has been filed before this Tribunal.
2. Heard both sides.
3. Shri Ankur Jain, ld. Counsel for the appellant, pleaded that the appellant had service tax registration in respect of banking services since 31.10.2004, that since the appellant Zonal Audit Office located at Meerut, were not directly providing service and were responsible for audit of the branches in their jurisdiction, they were under impression that their service tax registration is only for distributing credit, that the provisions for input service distributor were introduced in June 2005 but the Appellant started availing credit and distributing the same as ISD from October 2007, that merely because the Appellant did not obtain service tax registration specifically as input service distributor, the cenvat credit availed by them for distribution to branches cannot be denied and that in view of this, the impugned order upholding the cenvat creidit and penalty is not sustainable.
4. Shri Sanjay Jain, ld. Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and cited the judgments of the Tribunal in the cases of Khaitan Electricals vs. C.C.E., Kolkata VI reported in 2011 (21) STR 184 (Tri-Kolkata), Hindustan Coco Cola Beverages Pvt. Ltd. vs. C.C.E., Meerut II reported in 2011 (266) ELT 347 (Tri-Del.) and Acro Paints Ltd. vs. C.C.E., Jaipur reported in 2009 (15) STR 157 and Lotte India Corporation Ltd. vs. C.C.E., Pondicherry reported in 2010 (19) STR 870 (Tri-Chennai).
5. I have considered the submissions from both the sides and perused the records. There is no dispute that the appellant are the Zonal Audit Head office of Punjab National Bank and though they are registered in respect of banking services since October 2004, they were actually responsible only for audit of the records of the Branches of PNB within their jurisdiction and it is the branches which were providing banking services and were individually registered for service tax payment. There is no dispute that the Appellant as Zonal Audit Office were not providing banking/ financial services. The point of dispute is as to whether in this factual background, the appellant as Zonal Audit office of PNB could take cenvat credit on the basis of invoices issued in their name and distribute the same to the branches as input service distributor. In this case, there is no dispute that the service in question had been received and are covered by the definition of Input service and if the appellant had obtained separate registration as input service distributor, there would have been no objection to availing cenvat credit on the basis of invoices in the name of Zonal Audit office and distributing the same to the branches of PNB. In the peculiar facts and circumstances of the case when the Appellant , though not providing the banking/financial services, were registered as provider of banking service , since 2004, they should be treated as registered as ISD also, as they were for all practical purposes,, functioning as input service distributor and the availment of service tax credit and its distribution to various branches by issue of invoices were being reflected in the ST-3 returns being filed by them, which is what a registered Input Service Distributor would have done. I have gone through the judgments cited by the ld. D.R but none of them aer applicable to the facts of this case. I, therefore, hold that the Appellant could take the cenvat credit and distribute the same by issuing invoices to their branches. The impugned order is, therefore, not sustainable. The same is set aside. The appeal is allowed.
(Rakesh Kumar) Member (Technical) scd/ 1