2010 (7) TMI 470 - AT - Service Tax

Input service distributor (ISD) - respondent s Head Office in the issued invoice enabling the respondent s manufacturing unit to take cenvat credit - authority held that respondents did not take registration - the respondents were not eligible for the credit - Department s contention is that that existing unit should have registered on or before 16-6-05, when the notification came into effect - Held that - It does not stand to reason that the existing unit is given only 10 days time from the date of issue of Notification from 7-6-05 and that they are required to take registration before the date of commencement of the notification which is 16th day of June, 2005 - eligible for the credit taken is legal and proper - Appeal is rejected

Summary

Issues: Interpretation of Notification No. 27/05 dated 7-6-05 regarding registration timeline for input service distributor (ISD) under cenvat credit rules.

Analysis:
- The case involved an appeal by the Department against the order of the Commissioner (Appeals) regarding the eligibility of a respondent for cenvat credit registration under Notification No. 27/05 dated 7-6-05.
- The respondent, having a manufacturing unit at Negda and Head Office in Mumbai, registered as an ISD on 18-7-05, enabling cenvat credit amounting to Rs. 56,201.
- The original authority held the respondent ineligible for credit as they did not register by 16-6-05, ordering recovery of the credit and interest. The Commissioner (Appeals) overturned this decision.
- The Department argued that existing units should have registered by 16-6-05 as per the notification, given the respondent's long-standing business.
- The respondent contended that the notification took effect on 16-6-05 and allowed a 30-day registration period from that date, fulfilling the requirements by applying on 13-7-05.
- The Tribunal examined the notification's language and determined that the notification's effect began on 16-6-05, granting new units a one-month registration window. The Department's argument for existing units to register before the notification's commencement was rejected.
- Consequently, the Tribunal upheld the Commissioner (Appeals) decision, ruling that the respondent's registration within 30 days from 16-6-05 complied with the notification's conditions, making them eligible for the credit.
- The appeal by the Department was rejected, affirming the respondent's eligibility for the cenvat credit.

This detailed analysis highlights the key arguments, interpretations, and conclusions made by the Tribunal in resolving the issues related to the interpretation of Notification No. 27/05 dated 7-6-05 concerning the registration timeline for ISDs under cenvat credit rules.