2014 (2) TMI 209 - AT - Central Excise

Denial of the Cenvat Credit of the service tax paid for the services rendered and billed to the head office of the appellant - Held that - Invoices which are raised for the services rendered were in the name of the head office and their head office was not registered as input service distributor - Cenvat Credit which has been availed for the appellant of the service tax paid based on invoices/challans was in respect of the services provided by the Banks, Insurance Companies, transporters, Telecom Service, CHAs, Couriers, repairing & maintenance services. The invoices were issued on the name of the registered / head office situated at Mumbai. It transpires from the records that there is no dispute as to the fact that the services were rendered in this case. There is no allegation of non-receipt of input service or the allegation of service not relatable to the factory and also in view of the fact that invoice was in the name of head office of the same factory and not in the name of someone else, the decision of the Commissioner that extended period is not invocable also has to be upheld. Since I have taken a view that appellants are eligible for the credit and suppression of facts and extended period are not invocable, the question of penalty does not arise. Accordingly the penalty imposed is also set aside - Following decision of LARSEN & TOUBRO LTD. Versus COMMISSIONER OF C. EX, PUNE II 2007 (5) TMI 1 - SUPREME COURT OF INDIA - Decided in favour of assessee.

Summary

Issues:
Denial of Cenvat Credit based on invoices not in the name of the appellant's unit, Head office not registered as Input Service Distributor, Disallowance of credit availed, Imposition of penalty.

Analysis:
1. The appeal challenged the order disallowing Cenvat Credit of Rs.40,83,617/- for the period from September 2006 to July 2011 due to invoices not being in the appellant's name, issued by service providers to the head office located in Mumbai. The department contended that since the invoices were not in the appellant's name, the credit was inadmissible. The adjudicating authority confirmed the demand, along with interest and penalty under Cenvat Credit Rules, 2004 and Central Excise Act, 1944.

2. The appellant appealed to the first appellate authority, which upheld the decision based on the appellant's head office not being an Input Service Distributor and the invoices being in the name of the head office. The appellant argued that similar issues were decided in previous cases by the tribunal, citing relevant judgments.

3. The main contention was whether the appellant, having two units, could avail Cenvat Credit for services billed to the head office without the head office being an Input Service Distributor. The department argued that the credit should have been distributed by the head office. The tribunal analyzed the records and found that the dispute centered on the denial of Cenvat Credit based on services billed to the head office.

4. The tribunal noted that the appellant's head office was not registered as an Input Service Distributor, and the invoices were issued in the name of the head office. However, the Cenvat Credit availed by the appellant matched the service tax charged by the providers. Citing previous judgments, the tribunal concluded that the failure to distribute the credit proportionately was a procedural irregularity, not resulting in extra benefits or revenue loss.

5. Since there was no provision for distributing Cenvat Credit by the head office to various units during the relevant period, the tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with any consequential relief.

This detailed analysis covers the issues raised in the legal judgment, providing a comprehensive overview of the arguments, findings, and conclusions made by the tribunal.