2016 (8) TMI 288 - AT - Central Excise

Cenvat credit - Distribution of credit by the ISD - duty paying documents - levy of penalty - original duty paying documents in the name of headquarters not produced during adjudication proceedings Geld that cenvat credit allowed subject to the condition that the original duty paying document, on the basis of which Service Tax credit was taken, should be produced before the Adjudicating Authority for perusal - case remanded back to adjudicating authority for verification of original documents decided in favor of appellant subject to a condition.

Summary

Issues:
Whether Cenvat Credit can be taken on the basis of document issued in the name of Head Office of the Appellant for services received by all the units of the Head Office.

Analysis:
The Appellant filed an Appeal against an Order-in-Appeal passed by the Commissioner of Central Excise & Service Tax, Kolkata. The Appellant claimed a Cenvat Credit of ?3,46,659 based on services received by their Headquarters. The Appellant argued that taking credit on the basis of Service Tax invoices issued to the Headquarters is permissible, citing relevant case laws. The Revenue contended that Cenvat Credit was improperly taken as the prescribed document for credit was an ISD invoice from the Head Office, which was not provided. The issue was whether Cenvat Credit could be availed based on documents issued to the Head Office for services utilized by all units. The Tribunal referred to a similar case where Cenvat Credit was allowed even without proportionate allocation to various units. The Tribunal held that the failure to issue ISD invoices was a procedural irregularity and not a ground for denying credit. The Tribunal set aside the impugned order and allowed the appeal.

In a related case cited by the Tribunal, the issue was similar to the present case, and Cenvat Credit was held admissible. The Appellant's appeal was allowed on merit. However, during the hearing, it was noted that the original duty paying document was not produced before the department. The Tribunal directed the Appellant to produce the original document for verification by the Adjudicating Authority. The appeal was allowed on merit subject to the condition of producing the original duty paying document.

In conclusion, the Tribunal ruled in favor of the Appellant, allowing the appeal and setting aside the impugned order. The decision was based on the admissibility of Cenvat Credit on the basis of documents issued to the Head Office. The Appellant was directed to produce the original duty paying document for verification, and the appeal was allowed on merit with this condition.