2014 (4) TMI 571 - AT - Service Tax

Denial of cenvat credit - distribution of credit by the head office as ISD - The lower authority felt that the amount of credit availed by the appellant is ineligible as head office has availed and service tax paid based upon photo copies of debit notes dated 12/10/2004 which did not contain necessary particulars - Held that - debit notes have been issued by M/s.SSKI Corporate Finance Pvt. Ltd. We find that the said M/s.SSKI has specifically indicated the rate of service tax paid by them, and service tax Registration No. in their invoice. It is also seen that M/s.SSKI has issued the invoices addressed to Head Office at Bombay of appellant. There is no dispute as to services rendered by SSKI to the appellant at Head Office. Appellant s head office has transferred the cenvat credit of service tax paid by M/s.SSKI, as an input service distributor is also not disputed - Following decision of Godfrey Philips India Ltd. 2008 (12) TMI 90 - CESTAT, AHMEDABAD - Decided in favour of assessee.

Summary

Issues:
Denial of cenvat credit on invoices for transfer of cenvat credit, eligibility of head office as an input service distributor, requirements of debit notes for cenvat credit, judicial pronouncements on similar cases.

Analysis:
The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved the issue of denial of cenvat credit on invoices for the transfer of cenvat credit to the appellant based on debit notes lacking necessary details. The appellant's head office, registered as an input service distributor, had availed cenvat credit amounting to Rs. 13,26,001/- on service tax paid as per invoices issued by the Head Office. The lower authority contended that the credit was ineligible due to deficiencies in the debit notes, leading to a show-cause notice for denying the credit, interest, and penalties. Both the adjudicating authority and the First Appellate Authority upheld the denial of credit.

The appellant argued that the issue had been previously decided by the tribunal in a similar case, where the original debit notes provided by the service provider contained all required details, contrary to the photocopies initially submitted. The Tribunal examined the debit notes issued by M/s.SSKI Corporate Finance Pvt. Ltd., which included essential information such as the rate of service tax, service tax Registration No., and recipient details. It was established that the services were rendered to the appellant at their Head Office, and the cenvat credit was transferred accordingly.

The Tribunal emphasized that the head office, as a registered input service distributor, was entitled to distribute service tax credit to any of its units or factories. The Departmental representative confirmed that there were no plans to issue a show-cause notice to the input service distributor for incorrect availment of Cenvat Credit. Referring to a previous decision by the same Bench, the Tribunal highlighted the responsibility of the input service distributor to determine the eligibility of service tax credit before passing it on, as per self-assessment requirements.

Based on the factual findings and legal precedents, the Tribunal concluded that the denial of cenvat credit was erroneous. The impugned order was deemed unsustainable and set aside, allowing the appeal in favor of the appellant.