Service Tax
TRT-2025-
Cestat New Delhi
Date:-12-01-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 12 January 2023
Parties: M/s. Punjab National Bank Vs Commissioner, Central GST Division H
Facts –
- The Appellant, M/s. Punjab National Bank, is engaged in providing ‘banking and financial services’, is alleged to have wrongly availed the Cenvat credit of Service tax paid under reverse charge mechanism on services at their Zonal Training Centre (ZTC) and Zonal Audit Office (ZAO) which were not providing any taxable services.
- Cenvat credit on input services availed by ZO is disallowed by the department only on the ground that it is providing administrative support to 6 circle offices having different service tax registration whereas the appellant got the ZO registered under its centralized registration and availed Cenvat credit on input services availed by the said ZO and that any other circle offices have not availed any Cenvat credit in relation to the services availed by the said ZO.
- A show cause notice dated 03.02.2020 was issued, by invoking extended period of limitation, for recovery of Cenvat Credit availed by the appellant during the period 01.04.2016 to 30.06.2017 along with interest and penalty.
Issue –
- Whether the appellant has wrongly availed the Cenvat credit of service tax paid?
Order –
- The Tribunal finds that Zonal Training Centre (ZTC), Zonal Audit Office (ZAO) and Zonal Office (ZO) are assisting the appellant in the provision of its taxable services and have centralized accounting/ billing system. These offices been there in the same premises, as that of the appellant.
- It was held that only because these offices are situated separately is no ground to deny the Cenvat Credit to the appellant. These offices are integral part of the appellant and under the proper control and supervision of the appellant. They are not separate entity. They have paid service tax on the value of the taxable services provided by these offices.
- Therefore, the appellant is justified in availing Cenvat Credit in respect of input services availed by its Zonal Training Centre, Zonal Office and Zonal Audit Office (ZAO) in terms of Rule 2(l) of Cenvat Credit Rules, 2004 and the services received by these zonal offices fall under the definition of ‘input service’ as provided by Rule 2(l) ibid.
- Hence the appeal is allowed and demand has been set aside.
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