2013 (8) TMI 228 - AT - Central Excise

Cenvat credit - Invoice addressed at corporate office - Held that - The registered office and Vatva office both are located in the same place and appellant has simply utilised the credit at Vatva instead of distributing it to various units - It is also noticed that appellant has not got any extra benefit by doing this - In the absence of any legal requirement to avail credit based on the services received during the relevant time and in the light of the decision cited by the learned counsel, the procedural irregularity has to be ignored and the demand confirmed has to be set-aside - Decided in favour of assessee.

Summary

Issues:
Denial of CENVAT Credit due to address on invoices and lack of input service distribution registration.

Analysis:
The judgment revolves around the denial of CENVAT Credit to the appellant based on the Service Tax paid on services received in the corporate office and factory. The issue stemmed from the invoices having the address of the corporate office without having input service distribution registration. The period in question was from 28.06.2005 to 24.09.2005. The tribunal allowed the waiver of pre-deposit and proceeded with the appeal's disposal due to the issue being covered by previous decisions. The appellant's counsel referenced various decisions and highlighted the Division Bench's ruling in another case.

The Additional Commissioner argued that the appellant was not entitled to CENVAT Credit on invoices addressed to the corporate office without ISD registration. Both sides agreed on the essential facts, including service receipt, payment to the service provider, and the single factory location in Vadodara. The tribunal noted that the issue was similar to the Doshion Limited case, where the Bench concluded that the failure to register as an Input Service Distributor was a procedural irregularity. The tribunal found that the appellant did not gain any extra benefit and that proper distribution would have allowed full credit utilization, making the situation revenue-neutral.

Regarding the recovery proposal for service tax credit before 10-9-2004, the appellant had utilized the credit for payment without eligibility. The extended period was rightly invoked, and the demand was confirmed. However, the tribunal set aside the penalty on employees and the Director due to the majority of the demand being annulled. Ultimately, the tribunal held the impugned order as unsustainable and allowed the appeal based on the Division Bench's decision in the Doshion Limited case.

In conclusion, the judgment addressed the denial of CENVAT Credit, the procedural irregularity of lacking ISD registration, the utilization of service tax credit, and the applicability of previous decisions to the case at hand. The tribunal set aside the majority of the demand, upheld a portion of the service tax credit demand, and annulled penalties on certain individuals based on the circumstances and legal interpretations.