The Chandigarh bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that law does not mandate obtaining registration prior to availing of cenvat credit.
The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that the credit cannot be denied even if availed prior to registration as held in various cases cited above. In the absence of any demand for recovery of alleged incorrectly availed cenvat credit and confirmation, imposition of penalty equal to credit amount is not justified in law.
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Background
the appellant is engaged in the provision of various services to its customers located outside India. For providing such services, the appellant has its offices at various locations such as Gurgaon, Mumbai, Pune and Hyderabad. These locations are either SEZ/STP units or DTA locations.
The appellant had entered into an Agreement with Ingenix Pharmaceutical Services (UK) Ltd for providing two types of services of the Agreement with the appeal papers.
The services are Information Technology Enabled Data Management and Programming Services and the services mentioned in Exhibit B are Clinical Research Management and Resourcing Services (CRM services). These two specified services were being rendered by the appellant from two distinct business locations registered under separate service tax registrations with the department.
The DTA unit in Gurgaon was engaged in providing “CRM services‟ whereas STP units in Mumbai and Pune were engaged in providing “Data Management services‟.
The department issued a show cause notice and stated that the appellant had wrongly taken Cenvat Credit of input services on the strength of invoice before obtaining registration with the department or had wrongly taken Cenvat Credit on invoices which were not addressed to the registered premises.
Issue Raised
The issue raised was whether cenvat credit availed by the appellant prior to registration requires payment of interest.
Conclusion – Availing Of Cenvat Credit
The tribunal has held that the law does not mandate obtaining registration prior to availing of cenvat credit. Moreover, in the appellant’s own case, this Tribunal vide Final Order No. 60798/2021 dated 06.04.2021 in Appeal No. ST/41/2012 has allowed such credits. We also find that the Tribunal has consistently held in the various cases cited above that cenvat credit availed prior to registration is not invalid.
Read More: No Service Tax Payable On Consideration Received For Technical Know-How Transfer: CESTAT
FAQs
Is Prior Registration To Availing Of Cenvat Credit Mandatory?
No. The Chandigarh bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that law does not mandate obtaining registration prior to availing of cenvat credit.
Case Details
Case Title: Optum Global Solutions India Pvt Ltd Versus Commissioner of Central Goods & Service Tax
Case No.: Service Tax Appeal No. 60161 of 2013
Date: 08.10.2024
Counsel For Appellant: Prasad Paranjape
Counsel For Respondent: Siddharth Jaiswal
