2015 (9) TMI 1076 - AT - Central Excise

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 - Therefore, 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:
Appeal against denial of Cenvat Credit by Jaipur unit due to head office not being registered as input service distributor.

Analysis:
The appellant, a manufacturer of Ball Bearing with units in Jaipur, Manesar, and Newai, appealed against the denial of Cenvat Credit by Jaipur unit for services like Selling Commission, Royalty, etc. The Revenue contended that as the head office was not registered as an input service distributor, Jaipur unit was not entitled to the credit. The dispute revolved around whether the appellant could avail Cenvat Credit on services used by the head office without registration. The appellant argued that lack of registration did not affect credit entitlement, citing precedents like Demosha Chemicals Pvt. Ltd. and Doshion Ltd. The Revenue opposed, citing rules and cases like Nicholas Piramal (India) Ltd. and Mangalore Chemicals & Fertilizers Ltd.

The Tribunal examined whether the appellant could claim Cenvat Credit for services used by the head office without registration. Referring to Demosha Chemicals Pvt. Ltd., the Tribunal held that lack of registration as an input service distributor did not bar the appellant from availing credit. The Tribunal distinguished cases cited by the Revenue, emphasizing that proper procedure adherence was crucial. Relying on Demosha Chemicals Pvt. Ltd. and Doshion Ltd., the Tribunal concluded that the appellant rightly claimed Cenvat Credit on various services. Consequently, the impugned order was set aside, and the appeals were allowed with any consequential relief.

This judgment clarifies that lack of registration as an input service distributor does not automatically disentitle an entity from claiming Cenvat Credit on services utilized by the head office. It underscores the importance of following proper procedures and aligning with relevant precedents to determine credit eligibility. The decision provides guidance on interpreting Cenvat Credit rules concerning service usage and registration, ensuring fair treatment for taxpayers seeking credit benefits.