Service Tax Refund cannot be denied merely because FIRC contains address of HO instead of place where service was availed

HID India Private Limited Vs Commissioner of GST & Central Excise (CESTAT Chennai)

In this case refund of the unutilized cenvat credit was rejected holding that; firstly, the input services were received prior to obtaining the service tax registration from the Department; secondly, the invoices show the address of their Head office at Bangalore and not the address at Chennai where the services were availed; thirdly, the FIRC is received by their Bangalore office and therefore does not match with the address of the appellant at Chennai.

Held by CESTAT

Refund of unutilized cenvat credit cannot be denied for ITC received prior to obtaining the service tax registration 

The first issue is with regard to the rejection of refund claim holding that some of the input services have been received prior to obtaining service tax registration from the department. The Hon’ble jurisdictional High Court in the case of Scionspire Consulting Services (India) Pvt. Ltd. (supra) had considered the very same issue and held that the credit cannot be denied for the reason that the services have been availed in an unregistered premises. The Tribunal in the case of Vamshadhara Paper Mills Ltd. (supra) and Rajendra Kumar & Associates (supra) held that denial of credit cannot be justified on this ground. Following these decisions, I am of the view that the rejection of refund claims on this ground cannot be justified and requires to be set aside which I hereby do.

Service Tax Refund cannot be denied merely because FIRC contains address of HO instead of place where service was availed

 The other ground on which the refund has been rejected is that FIRC statement bears the address of their Bangalore Head office and also that invoices bear the address of the Bangalore Head office. This issue has been analysed by the Tribunal in the appellant’s own case for a different period and it has been held that the credit is eligible. Following the decisions in the above stated final order, I am of the view that the rejection of the refund claim cannot be justified.

FULL TEXT OF THE CESTAT CHENNAI ORDER

The issues involved in these appeals being the same, they are heard together and disposed of by this common order.

2. Brief facts of the case are that the appellant holds Service Tax registration for the services in the nature of Information Technology Software Service, Rent-a-Cab Service, Security/Detective Agency Service, Man Power Recruitment/Supply Agency Service, Legal Consultancy Service. They filed refund claims under Rule 5 of Cenvat Credit Rules (CCR), 2004 read with Notification No.27/2012-CE (NT) dated 18.06.2012 for the period from October 2015 to December 2015 and January 2016 to March 2016 for refund of the unutilized cenvat credit. The above refund claims were rejected holding that; firstly, the input services were received prior to obtaining the service tax registration from the Department; secondly, the invoices show the address of their Head office at Bangalore and not the address at Chennai where the services were availed; thirdly, the FIRC is received by their Bangalore office and therefore does not match with the address of the appellant at Chennai.

3. Against the orders of rejection of refund passed by the adjudicating authority, the appellant filed appeals before Commissioner (Appeals) and vide order impugned herein, the Commissioner (Appeals) upheld the orders passed by the original authority. Hence these appeals.

4. On behalf of the appellant, Ld. Consultant Shri K. Dayananda appeared and argued the matter.

4.1 With regard to the first issue that the appellant is not eligible for refund of the credit availed on input services for the reason that the input services were availed before obtaining registration, it was submitted by the Ld. Consultant that the said issue stands settled by the decision of the Hon’ble jurisdictional High Court in the case of Scionspire Consulting Services (India) Pvt. Ltd. – 2017-TIOL-798-HC-MAD-ST. He submitted that the Tribunal in the case of Vamshadhara Paper Mills Ltd. Vs CGST & CE Chennai – 2020 (33) G.S.T.L 218 (Tri.-Chennai) and in the case of Rajendra Kumar & Associates Vs CST Delhi – 2021 (45) G.S.T.L 184 (Tri.-Delhi) had held that credit cannot be denied for the reason that the premises has not been registered. He submitted that CCR 2004 does not specify that the credit can be availed only after obtaining registration from the department.

4.2 On the second issue of rejecting refund which is that the invoices bear the address of the Head office at Bangalore, Ld. Consultant submitted that some of the vendors have mentioned the address of their Bangalore office in the invoices. The services have been availed at Chennai. The department has no dispute in regard to this aspect. He submitted that the said issue has been held in appellant’s favour in their own case by the Tribunal vide Final Order No.42286-42288/2021 dated 30.08.2021.

4.3 The third ground of rejection of refund is that the FIRC statement bears the address of their Bangalore office. He submitted that the appellant-company has only one bank account which is at Bangalore. The banker has issued the FIRC copy with the address at Bangalore as per their records. A single bank account cannot be registered with multiple addresses and therefore the requirement for furnishing FIRC has been complied. This issue was considered by the Tribunal in the final order stated above and held in favour of the appellant. He prayed that the appeals may be allowed.

5. A.R Ms. Sridevi Taritla appeared for the Department. She supported the findings in the impugned order.

6. Heard both sides.

7. The first issue is with regard to the rejection of refund claim holding that some of the input services have been received prior to obtaining service tax registration from the department. The Hon’ble jurisdictional High Court in the case of Scionspire Consulting Services (India) Pvt. Ltd. (supra) had considered the very same issue and held that the credit cannot be denied for the reason that the services have been availed in an unregistered premises. The Tribunal in the case of Vamshadhara Paper Mills Ltd. (supra) and Rajendra Kumar & Associates (supra) held that denial of credit cannot be justified on this ground. Following these decisions, I am of the view that the rejection of refund claims on this ground cannot be justified and requires to be set aside which I hereby do.

8. The other ground on which the refund has been rejected is that FIRC statement bears the address of their Bangalore Head office and also that invoices bear the address of the Bangalore Head office. This issue has been analysed by the Tribunal in the appellant’s own case for a different period and it has been held that the credit is eligible. Following the decisions in the above stated final order, I am of the view that the rejection of the refund claim cannot be justified.

9. In the result, the impugned order is set aside and the appeals are allowed with consequential relief, if any.

(Pronounced in court on 17.03.2022)