In a relief to the IBF Industries, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad has held that once the department has accepted the payment of service tax on their output service, the cenvat credit cannot be denied on the input services which are used for providing output service.
BACKGROUND
The appellant is a branch of IFB Industries Limited. Through this branch the appellant are providing the repair & maintenance service to the individual customer of IFB Industries Limited on which they are paying service tax, they are also availing cenvat credit and various expenditures incurred in respect of Advertisement expense, Telephone bills, Bank charges, Insurance etc. The services were used for providing output service, therefore, the cenvat credit is rightly availed by the appellant.
The lower authorities have denied the cenvat credit only on the ground that since the appellant’s service unit is part of their Goa unit, therefore, they cannot separately operate as independent service provider. Hence, the cenvat credit cannot be availed.
The appellant stated that as regard the payment of service tax by the appellant branch is not under dispute therefore, the credit should not be denied.
RULING
The tribunal held that even though the appellant service tax registration is on the common PAN basis, the appellant has taken separate registration for their Ahmedabad service branch. They are also discharging service tax on the output service of repair and maintenance of equipment and appliances of IFB Industries Limited.
The CESTAT held that the appellant is entitled for the cenvat credit amount of Rs. 4,06,163.
Case Title: Ifb Industries Limited Versus
Citation: Final Order No. A/ 11622 /2023