Relief for TTK Prestige: CESTAT Allows CENVAT Credit on ISD Invoices for Business Related Services [Read Order]

The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) allowed CENVAT credit to TTK Prestige Ltd on service tax paid through ISD invoices for various business-related services.

TTK Prestige Ltd, appellant-assessee, was engaged in manufacturing stainless steel and aluminium pressure cookers and pans, and paid Central Excise Duty under Section 4A of the Central Excise Act, 1944. It availed Cenvat Credit on inputs and input services under the Cenvat Credit Rules, 2004.

Between October 2010 and January 2011, the assessee took Cenvat Credit of ₹19,67,052/- based on ISD invoices issued by its corporate office for services such as transport, courier, maintenance, advertising, chartered accountant fees, inspection, and others.

The Department held that these services were used at locations other than the factory, which was the place of removal, and therefore ineligible for credit. A show cause notice was issued seeking recovery of the credit along with interest and proposing penalty.

The Adjudicating Authority confirmed the demand through Order-in-Original dated 30.11.2012. The Commissioner (Appeals) upheld this order on 03.11.2014. The appellant then filed the present appeal before the tribunal.

A single member bench of P.Dinesha (Judicial Member) after hearing both sides and examining the records, considered whether the appellant was eligible to avail credit of the service tax paid on the impugned services. It noted that in the assessee’s own case for an earlier period, the same issue had been analysed and decided by the tribunal in Final Order No. 40331/2018 dated 19.01.2018.

In that order, the appellate tribunal had held that the main reason for denying credit was that the services were availed through ISD invoices issued by the corporate office. The Department had argued that these services were not consumed at the manufacturing unit and had no nexus with manufacturing activities. However, the bench had clarified that once the corporate office had obtained input service distributor registration, the distribution of credit through ISD invoices was in line with the law.

It further observed that services such as transportation, courier, maintenance, C&F agent, advertising, chartered accountant fees, recruitment, inspection, and others were related to the business of the manufacturer and qualified as input services, as supported by decisions in Ultratech Cement Ltd. and Coca Cola India Pvt. Ltd.

Relying on this earlier decision, the CESTAT held that the issue was squarely covered in favour of the appellant. Accordingly, it set aside the impugned order and allowed the appeal.

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