2013 (5) TMI 702 - AT - Central Excise

Eligibility for availment of Cenvat credit - ISD - Input Service Distributor - cenvat credit of service tax on the basis of documents issued by Head Office distributing cenvat credit in respect of services availed by the company. - held that - The issue relating to cenvat credit is covered by the decision of the Hon ble High Court of Karnataka in the case of ECOF Industries Pvt. Ltd. 2011 (2) TMI 1130 - KARNATAKA HIGH COURT wherein it has been held that credit could not be denied on the ground that the input services were received in some other units and distribution of input service need not have been made on the basis of receipt or unit of receipt and not restricting of cenvat credit during the time. - decided in favor of assessee.

Summary

Issues involved: Whether the appellant can take cenvat credit of service tax based on documents issued by the Head Office distributing cenvat credit for services availed by the company.

Analysis:

1. The case involved a crucial issue of whether the appellant was entitled to claim cenvat credit of service tax based on documents issued by the Head Office distributing cenvat credit for services utilized by the company. The proceedings resulted in an order confirming demand and penalty, asserting that the cenvat credit could not have been transferred to the appellant by the Head Office as the services were used by other units.

2. The Hon'ble Member (Technical) considered the arguments from both sides and observed that the issue at hand was already addressed in a decision by the Hon'ble High Court of Karnataka. Due to the alignment of the present case with the Karnataka High Court's ruling, the pre-deposit requirement was waived, and the appeal was directly taken up for a decision.

3. The judgment referred to a significant precedent set by the Hon'ble High Court of Karnataka in the case of ECOF Industries Pvt. Ltd. The Court in that case had held that denying credit based on the input services being received in other units was not justifiable. It was established that the distribution of input services did not have to be linked to the receipt or unit of receipt, and there should be no restriction on cenvat credit during the relevant period.

4. Consequently, the appeal was allowed, and any consequential relief was granted in favor of the appellant. The decision was dictated and pronounced in court, providing a clear resolution to the issue of cenvat credit in the context of service tax distribution within a company's units.