2017 (10) TMI 1305 - AT - Central Excise

CENVAT credit - whether the appellant s Bhachau Steel Unit is entitled to Cenvat credit of service tax paid on the GTA service by their Khambhalia Coke Unit, not registered as an Input Service Distributor(ISD)? - Held that - the issue is covered by the judgement of the Hon ble Gujarat High Court in Dashion Ltd s case 2016 (2) TMI 183 - GUJARAT HIGH COURT , where it was held that there is nothing in the said Rules of 2005 or in the Rules of 2004 which would automatically and without any additional reasons dis-entitle an input service distributor from availing Cenvat credit unless and until such registration was applied and granted. Also in the Chartered Accountant s Certificate it is categorically stated that the service tax was paid on GTA Service by the Khambhalia coke Unit which had been received and used in their Bhachau Steel Unit, consequently the credit was availed at the Bhachau Steel Unit. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant's Bhachau Steel Unit is entitled to Cenvat credit of service tax paid on the GTA service by their Khambhalia Coke Unit, not registered as an Input Service Distributor (ISD).

Analysis:
The appeal was filed against the order-in-appeal passed by the Commissioner (Appeals) of Central Excise, Customs, and Service Tax. The main issue in this case was whether the Bhachau Steel Unit could claim Cenvat credit for the service tax paid on GTA service by the Khambhalia Coke Unit, which was not registered as an ISD during the relevant period. The appellant argued that even though the Khambhalia Coke Unit was not registered as an ISD at the time, the Bhachau Steel Unit should still be allowed to take credit for the service tax paid on GTA service used at their facility. The appellant cited a judgment of the Hon'ble Gujarat High Court in support of their argument.

The Advocate for the appellant highlighted that the GTA service was received and used by the Bhachau Steel Unit, but the service tax liability was paid by the Khambhalia Coke Unit, which was later registered as an ISD. The appellant argued that the lack of ISD registration at the time should not prevent the Bhachau Steel Unit from claiming the credit. The Advocate referred to the Gujarat High Court judgment in the case of Commissioner of Central Excise vs. Dashion Ltd to support their stance.

The Appellate Tribunal referred to the judgment of the Hon'ble Gujarat High Court in the case of Dashion Ltd, where it was observed that the registration of an input service distributor is not an automatic disqualification for availing Cenvat credit. The Tribunal considered the irregularity as procedural and curable, especially when full records were maintained and available for verification by the Revenue. Based on this precedent, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief as per the law.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the Bhachau Steel Unit to claim the Cenvat credit for the service tax paid on GTA service by the Khambhalia Coke Unit, even though the latter was not registered as an ISD at the relevant time. The decision was based on the interpretation of relevant rules and the precedent set by the Gujarat High Court judgment in a similar case.