2015 (9) TMI 1035 - AT - Service Tax

Denial of CENVAT Credit - whether appellant is entitled to avail Cenvat Credit on the services which has been availed by their Head Office and the Head Office is not registered as input service distributor during the impugned period or not - Held that - appellant cannot be denied Cenvat Credit availed by them in the absence of registration as input service distributor by the Head Office - relying on the case laws cited by the Ld. Counsel in the case of Demosha Chemicals Pvt. Ltd. (2014 (2) TMI 209 - CESTAT AHMEDABAD) and Doshion Ltd. (2012 (10) TMI 952 - CESTAT AHMEDABAD) we hold that appellant has correctly taken Cenvat Credit on the services namely Selling Commission, Royalty, Consultancy & Professional, Banking Charges, Audit Fee, AMC Charges, etc. - Therefore, impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
- Entitlement of Cenvat Credit by appellant on services utilized by their Head Office without registration as input service distributor.

Analysis:

The appellants appealed against orders denying Cenvat Credit on services availed by their Jaipur unit, which were invoiced in the name of the Head Office. The Revenue contended that as the Head Office was not registered as an input service distributor, the Jaipur unit was not entitled to the full credit. The dispute centered on whether the appellant could claim Cenvat Credit without such registration. The appellant argued that being unregistered did not affect their entitlement to the credit, citing precedents such as Demosha Chemicals Pvt. Ltd. and Doshion Ltd. The Revenue contended that proper procedure under the Cenvat Credit Rules was not followed, relying on cases like Nicholas Piramal (India) Ltd. and Mangalore Chemicals & Fertilizers Ltd.

The Tribunal considered whether the appellant could claim Cenvat Credit on services utilized by the Head Office without registration as an input service distributor. Referring to the Demosha Chemicals Pvt. Ltd. case, the Tribunal noted that the appellant had availed credit based on invoices issued in the name of the Head Office, not the appellant directly. The Tribunal found that the appellant had not exceeded eligible credit amounts and that the non-registration as an input service distributor was a procedural irregularity. Citing Doshion Ltd., the Tribunal observed that the appellant had not gained extra benefit and that proper distribution would have allowed full credit utilization. Therefore, the demand for Cenvat credit was set aside.

The Tribunal reviewed case laws cited by both parties and concluded that the appellant was entitled to the Cenvat Credit on the services in question. Relying on Demosha Chemicals Pvt. Ltd. and Doshion Ltd., the Tribunal held that the appellant had correctly availed the credit despite the lack of registration as an input service distributor by the Head Office. The Tribunal found the Revenue's cited cases not applicable to the current scenario, emphasizing that adherence to proper procedures was essential for credit availment. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.