2011 (3) TMI 776 - AT - Service Tax

Cenvat credit - The said credit stands denied on the ground that at the time of availing input service credit, the ISD was not registered and as such, the invoices issued by them cannot be considered to eligible invoices for the purpose of availment of cenvat credit - Held that appellants originally applied for centralized registration on 23-3-2005, which was denied to them on 19-1-2006 - it is not disputed that centralized registration was subsequently granted to the shared service centers, Kolkata and Chennai and the appellant is availing the benefit of credit of service tax based upon the invoices issue by them Denial of service tax credit on the basis of technical and procedural grounds as non-mention of certain facts in the invoices, may not be justifiable - Held that pre-deposit of duty confirmed and penalty imposed upon against them is required to be dispense with

Summary

Issues: Denial of modvat credit of service tax, Registration denial and subsequent grant, Completeness of invoices, Pre-deposit of duty and penalty

Denial of modvat credit of service tax:
The judgment addresses the denial of modvat credit of service tax to the appellants based on the ISD invoices issued by their shared service centers. The denial was due to the ISD not being registered at the time of availing input service credit, rendering the invoices ineligible for cenvat credit. The Commissioner noted deficiencies in the invoices, such as missing registration numbers and incomplete details. The tribunal considered the lapse on the part of the department in denying centralized registration, leading to subsequent registration and the appellants benefiting from the credit based on invoices from shared service centers.

Registration denial and subsequent grant:
The appellants initially applied for centralized registration, which was denied but later granted following a clarification from the Board. The tribunal acknowledged that the denial of registration was due to a departmental lapse. Despite the delay, centralized registration was eventually provided to the shared service centers in Kolkata and Chennai, enabling the appellants to avail service tax credit based on their invoices.

Completeness of invoices:
The judgment highlighted issues with the completeness of the invoices, including the absence of certain details like input service distributor registration numbers, non-preprinted invoices, and missing input service provider registration numbers. Despite these deficiencies, the tribunal found that denying service tax credit on technical and procedural grounds might not be justifiable. Consequently, the tribunal concluded that the pre-deposit of duty confirmed and penalty imposed should be waived, allowing the stay petitions.

Pre-deposit of duty and penalty:
The tribunal, after considering both sides and the objections raised, concluded that the denial of service tax credit based on technical and procedural grounds was not justifiable. Therefore, the tribunal decided to dispense with the pre-deposit of duty confirmed and penalty imposed against the appellants. The stay petitions were allowed, indicating a favorable outcome for the appellants based on the tribunal's analysis and decision.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Ahmedabad, covers the denial of modvat credit of service tax, registration issues, completeness of invoices, and the decision regarding the pre-deposit of duty and penalty, providing a comprehensive overview of the legal aspects and conclusions reached in the case.