2016 (10) TMI 31 - AT - Central Excise

Recovery of Cenvat credit - Cenvat Credit availed on various input services - input service invoices were in the name of their Head Office, at Mumbai, which was not registered as an Input Service distributor - Held that - except on the ground that relevant input service invoices were not in the name of their Vapi but in the name of Head Office, and the Head Office was not registered as an Input Service Distributor, the Cenvat Credit availed on such invoices even though the services were utilised in or in relation to the manufacture of excisable goods at their Vapi unit, had been denied. I find that the issue is covered by the decision of Hon ble Gujarat High Court in the case of CCE Vs Dashion Ltd 2016 (2) TMI 183 - GUJARAT HIGH COURT . Therefore, in view of the same, the impugned order is set aside. - Decided in favour of appellant

Summary

Issues Involved:
1. Denial of Cenvat Credit on input services due to invoices being in the name of Head Office.
2. Imposition of penalty on the appellant and its employee under Rule 26 of the Central Excise Rules, 2002.

Analysis:

Issue 1: Denial of Cenvat Credit on input services due to invoices being in the name of Head Office

The appellant, engaged in manufacturing Aluminum Foils, availed Cenvat Credit on input services during a specific period. However, the invoices for these services were in the name of their Head Office, which was not registered as an Input Service Distributor. This led to a show cause notice for recovery of the credit and imposition of penalties. The appellant argued that despite the invoicing issue, they fulfilled all conditions for availing the credit as the services were used in the manufacturing process. The appellant cited a decision of the Hon'ble Gujarat High Court to support their claim. The Tribunal noted that the denial of credit solely based on the Head Office not being registered as an Input Service Distributor was not justified. Citing the Gujarat High Court decision, the Tribunal emphasized that the irregularity was procedural and did not automatically disentitle the appellant from availing Cenvat credit. The Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeals with consequential relief.

Issue 2: Imposition of penalty on the appellant and its employee under Rule 26 of the Central Excise Rules, 2002

The imposition of penalties on the appellant and its employee was a result of the denial of Cenvat Credit on input services. However, since the Tribunal found in favor of the appellant regarding the denial of credit, the penalties imposed were also set aside along with the impugned order. The Tribunal's decision to allow the appeals with consequential relief effectively nullified the penalties imposed, providing a favorable outcome for the appellant and its employee.

In conclusion, the Tribunal's judgment in this case addressed the denial of Cenvat Credit on input services due to invoicing issues and the subsequent imposition of penalties. By ruling in favor of the appellant and citing relevant legal precedents, the Tribunal provided a comprehensive analysis leading to the setting aside of the impugned order and allowing the appeals with consequential relief.