2014 (5) TMI 215 - AT - Service Tax

CENVAT Credit - whether the Cenvat credit can be availed by the appellants in respect of inputs service credit distributed by the Estate Department of the Bank when that Department was not registered as input service distributor - Held that - We have examined requirement of Rule 9 of Cenvat Credit Rules, 2004 which requires that satisfaction of the Department is to be recorded on the materials produced before it. The documents that need verification under the Rule is that respective challans, invoice or bills issued by the input service distributor under Rule 4A of the Service Tax Rules, 1994 - Cenvat credit claimed is not deniable. But particulars of registration did not appear in the input distribution evidence relied upon by appellant. If an assessee is registered and documents, which are not known to law are produced or such documents become questionable under law, that shall not ipso facto grant right to the claimant to get Cenvat credit even if that contains a registration number. Therefore, while registration is one of the requirement for verification, the documents, which are led in support of the claim, are equally primary to be considered in all material particulars to consider admissibility of Cenvat credit. - In the fitness of the circumstances, considering that subsequent adjudication proceedings were dropped in the case of same appellant, there is nothing to doubt conduct of the appellant as to its existence and issuance of relevant genuine documents relied upon by the appellant. - Decided in favour of assessee.

Summary

Issues:
1. Whether Cenvat credit can be availed by appellants for inputs service credit distributed by the Estate Department of the Bank without being registered as an input service distributor.

Analysis:
In this case, the primary issue revolves around the eligibility of the appellants to claim Cenvat credit for input service credit distributed by the Estate Department of the Bank, despite the department not being registered as an input service distributor. The period in question spans from 16-6-2005 to 28-8-2006, during which the Estate Department sought registration with the Service Tax Authorities. The appellant argues that even before registration, the service distributed, which had incurred Service Tax, made them eligible for Cenvat credit, citing the absence of strict registration rules before 16-6-2005 and the introduction of the input service distribution concept in September 2004.

The appellant contends that as long as the particulars in the documents support the requirements of Rule 9 of the Cenvat Credit Rules, 2004, the credit should be granted. The law necessitates that the particulars on the document are verifiable, and the Service Tax paid is deposited into the treasury. The absence of registration should not be a reason to deny Cenvat credit based on distributed credit from the Estate Department. The Revenue representative argues that verification is not possible without registration, but the appellant highlights a subsequent adjudication order that dropped the entire demand, confirming the bank's registration with the Service Tax Authorities for banking and financial services.

Upon examining the records, the Tribunal delves into Rule 9 of the Cenvat Credit Rules, emphasizing the verification of documents like challans, invoices, or bills issued by the input service distributor. While the issuance of these documents is not disputed, the Tribunal analyzes the scheme of Cenvat credit under Rules 3 & 4. The Tribunal asserts that while registration is crucial for verification, the credibility and compliance of the documents presented by the appellant are equally significant in determining the admissibility of Cenvat credit.

Considering the dropped adjudication proceedings and the credibility of the documents provided by the appellant, the Tribunal finds no reason to doubt the appellant's conduct or the authenticity of the documents. Consequently, all appeals are allowed, and stay applications are disposed of accordingly.

In conclusion, the judgment resolves the issue by affirming the appellants' right to claim Cenvat credit for input service credit distributed by the Estate Department of the Bank, even in the absence of registration, based on the credibility and compliance of the documents provided.