2015 (5) TMI 67 - AT - Service Tax

Eligibility of CENVAT credit - non registration as Input service distributor (ISD) - Business Auxiliary Services - whether the service rendered by the service provider for the products manufactured in Gujarat and invoices raised can be availed as CENVAT Credit at Mumbai - Held that - there is no dispute as regards the services received by the appellant for the activity and service tax liability having been discharged by the service provider, omission to take registration as an Input Service Distributor is to be considered as procedure irregularity - decisions in the cases of Mangalore Refinery and Petrochemicals (2013 (9) TMI 326 - CESTAT BANGALORE) Market Creators Ltd. (2014 (7) TMI 704 - CESTAT AHMEDABAD) relied on by learned A.R. have rendered by the Single Member Bench. The judicial discipline, Division bench decision needs to be followed giving precedence over decision of Single Member Bench. Accordingly, the decision in the case of Doshion Ltd. (2012 (10) TMI 952 - CESTAT AHMEDABAD) of Division Bench is binding on me and following the same I find that the impugned order is liable to be set aside and I do so. - Decided in favour of assessee.

Summary

Issues involved:
Eligibility of CENVAT credit of service tax paid by a Marketing Agency for products manufactured in different units.

Analysis:
The appeal challenges Order-in-Appeal No. BR(8)MI/2013 dated 7.01.2013 concerning the eligibility of CENVAT credit of service tax paid by a Marketing Agency for products manufactured in Gujarat and Mumbai units. The Revenue argues that service tax paid for marketing goods produced in Gujarat should not be availed proportionately for products cleared from Mumbai. Lower authorities held that CENVAT credit at Mumbai for goods manufactured in Gujarat was not permissible, as marketing services were deemed unrelated to manufacturing. The appellant cited the decision in the case of Doshion Ltd. (288) ELT 291 (T) to support their claim.

The dispute revolves around whether CENVAT credit on service tax paid by the service provider for goods manufactured in Gujarat can be availed in Mumbai. The Tribunal found that the services were rendered to the appellant, and the only issue was the utilization of credit at different units. The failure to register as an Input Service Distributor was deemed a procedural irregularity, as per the decision in the case of Doshion Ltd. The Tribunal emphasized that there was no restriction on credit utilization without allocation during the relevant period, and the omission to register as an ISD should be viewed sympathetically.

The Tribunal distinguished the decisions in Mangalore Refinery and Petrochemicals and Market Creators Ltd., as they were rendered by Single Member Benches. Following judicial discipline, the Division Bench decision in the case of Doshion Ltd. was considered binding, leading to the setting aside of the impugned order. Consequently, the appeal was allowed, and the impugned order was overturned.