The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), granted relief to M/s. Punjab National Bank ( PNB ) and allowed cenvat credit on input services.
The issue involved herein is whether the appellant can avail Cenvat Credit in respect of input services availed by its Zonal Training Centre (ZTC), Zonal Office (ZO) and Zonal Audit Office (ZAO) in terms of Rule 2(l) of Cenvat Credit Rules (CCR), 2004 and whether the services received by Zonal Training Centre, ZonalOffice and Zonal Audit Office falls under the definition of ‘input service’ as provided by Rule 2(l) of CCR.
It is the case of the department that the appellant, who is engaged in providing ‘banking and financial services’, has wrongly availed the Cenvat credit of service tax paid under reverse charge mechanism on and GTA service and service tax paid on telephone bills, availed at their ZTC and ZAOwhich were not providing any taxable services, whereas ZO is providing administrative support to the entire zone covering 6 circle offices having different service tax registration and the appellant being one of the circle offices, cannot claim the whole Cenvat credit of input services availed by ZO.
The Counsel for the appellant submitted that the Cenvat credit on input services availed by ZO was 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.
According to Authorised Representative appearing for the Revenue, the appellant have wrongly availed Cenvat credit in issue inasmuch as, the same is related to the services availed at their Zonal Training Centre, Zonal Office and Zonal Audit Office, out of which Zonal Training Centre and Zonal Audit Office were not providing any taxable output service, whereas Zonal Office is having jurisdiction over six other circles and hence, the credit is not admissible.
The Tribunal of Ajay Sharma, Judicial Member observed that “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) of CCR.”
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