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2023 (1) TMI 542 - AT - Service TaxCENVAT Credit - input services or not - 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, 2004 - Reverse charge mechanism - whether the services received by Zonal Training Centre, Zonal Office and Zonal Audit Office falls under the definition of ‘input service’ as provided by Rule 2(l) ibid? - HELD THAT:- Admittedly the centralized registration has been obtained by the appellant in terms of Rule 4(2) of Service Tax Rules, 1994. The said rule provides that if a person is providing any taxable service and using one or more separate premises, which are assisting directly or indirectly in providing such taxable services and has centralized billing/accounting system, then the service tax registration for such separate premises can be obtained under the centralized service tax registration. This is irrespective of the fact that such other separate premises are providing any taxable service on their own or not. It is the case of the appellant that these 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. Since generally training centre and audit office are considered as integral part of any establishment therefore, there are force in the submissions of learned Counsel that these offices are integral part of the appellant and play an important role, directly or indirectly, in providing output service by the appellant smoothly. These offices are inevitable for the working of the appellant. Although they are not providing any taxable services on their own but are assisting the appellant in providing its output services efficiently. The appellant has successfully established that these three zonal offices are integral part and parcel of the appellant only and the fact that they are located separately hardly makes any difference. 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. Therefore, the demand raised in the show cause notice is not sustainable and once the demand has been set aside, there is no question of any interest or penalty. Appeal allowed.
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