By TIOL News Service

MUMBAI, JULY 02, 2015: THE appellant availed Cenvat Credit in respect of service paid on rent of Gala No. A-07, Pravasi Industries Estate, Goregaon (E), which was not part of their manufacturing premises.

The jurisdictional authorities denied the credit and imposed penalty and interest.

As the Commissioner(A) upheld this order, the appellant is before the CESTAT.

It is submitted that after inclusion of the said premises on 31/3/2009 in their registration certificate the Revenue allowed the Cenvat Credit however credit for the prior period is denied only on the ground that the said premises was not included as the part of the factory premises. The appellant also argued that for taking Cenvat credit in respect of the rental premises it is not necessary or it has not been provided in the CCR that the said premises should be included in the registered premises of the factory.

The AR reiterated the findings of the lower authorities.

The Single Member Bench observed –

"5. I find that as far as use of the premises is concerned it is not in dispute that same is used in connection with activity of the factory such as storage of goods. For the same use Revenue has allowed credit, subsequent to the date of inclusion of such premises in the registered premises of the factory therefore as far as use prior to the inclusion in the registered premises or thereafter it is same, therefore, it cannot be said that merely premises is not included in the registration premises the same is not used for activity related to manufacture. The whole emphasize for disallowing credit was given by the lower authorities on the ground that since the said rental premises was not included in the registered premises therefore credit is not admissible. As I discussed, use before or after, when it is meant for factory activity, credit is admissible whether the premises was included in the registered premises or otherwise. It is kept in mind that service is not tangible unlike inputs or capital goods. Scope of service is not limited within the four corner of factory, even if same services are received by the appellant at any place directly or indirectly related to manufacture of activity or related to business activity of the assessee irrespective whether it is provided within the factory or out side the factory, credit is admissible. Therefore in my considered view so long as rental premises in the present case is used for manufacturing activity of factory unit, credit is admissible, therefore the impugned order is set aside…."

The Appeal was allowed.

In passing: Incidentally, the Division Bench had, in the matter of the stay application, passed an order dated 14.02.2012 (See 2012-TIOL-796-CESTAT-MUM) directing the appellant to make a pre-deposit of the entire amount of CENVAT credit involved of Rs.57,407/-.

(See 2015-TIOL-1296-CESTAT-MUM)