2012 (11) TMI 432 - AT - Service Tax

Cenvat credit input service distributor Revenue contended that appellant had two factories, the head office should have registered itself as an input service distributor and therefore, availment of credit is wrong Held that - only ground on the basis of which the credit has been denied is that the registration number was not available and this has been explained subsequently by the respondent by explaining by the time instructions were issued by the Government, the Head office had already issued the invoice and therefore, procedural requirement could not be fulfilled credit allowed. Decision in the case of Jindal Photo Limited - 2009 (1) TMI 187 - CESTAT, AHMEDABAD followed.

Summary

Issues: Availment of cenvat credit based on invoices from unregistered head office, applicability of decisions by Tribunal, verification of receipt of input services.

In this case, the respondent availed cenvat credit of service tax based on invoices from their unregistered head office. The appellant argued that since the head office was not registered as an input service distributor and the respondent had multiple units, the credit availed was incorrect. The original adjudicating authority confirmed the demand and imposed a penalty. On appeal, the Commissioner (Appeals) allowed the appeal, citing decisions by the Tribunal in similar cases. The Revenue contended that the head office should have registered as an input service distributor due to having two factories, and the decisions were not applicable as verification of goods receipt is possible but not for services. However, the Tribunal found that the decisions were relevant as they dealt with cenvat credit on input services, similar to the current case. The Tribunal also highlighted the provisions of Rule 9 of Cenvat Credit Rules, emphasizing the need for verification of receipt of input services. The Tribunal concluded that the decision of the Commissioner to follow the Tribunal's precedent was correct, and rejected the appeal filed by the Revenue.

This judgment addresses the issue of availing cenvat credit based on invoices from an unregistered head office, emphasizing the importance of compliance with input service distributor registration requirements. It also clarifies the applicability of Tribunal decisions in similar circumstances and underscores the necessity of verifying the receipt of input services for claiming credit. The Tribunal's analysis of the relevant legal provisions demonstrates the need for adherence to the rules and procedures governing cenvat credit. The judgment highlights the responsibility of executives to implement the rules effectively and the importance of ensuring proper verification of input services to prevent incorrect availment of credit.