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2016 (12) TMI 158 - AT - Central ExciseDemand - CENVAT credit in the name of other unit - job worker - appellants had not taken registration as Input Service Distributors (ISD) under Rule 4(A) of Service Tax Rule, 1994 - Held that - I find that the appellants had kept the jurisdictional authority duly informed about the job work for them being done at their Unit-II. The procedure for registration as Input Service Distributer came into being on 16.06.2005, which is in the middle of the period involved in this case from June 2004 to February 2006. Admittedly, there was nexus between Unit-I and Unit-II. There is no allegation that credit was not admissible. It is merely that the procedure which came into being in June, 2005 was not followed - reliance placed in the decision of the case of Pricol Ltd. Vs. CCE, Coimbatore 2015 (1) TMI 350 - CESTAT CHENNAI , where it was held that in case of procedural irregularity, the substantive benefit should not be denied. The Cenvat Credit of ₹ 34528/- is held to be admissible to the appellants - appeal allowed - decided in favor of assessee.
Issues:
Whether Cenvat Credit on input service taken by unit-II of the appellants could be utilized by unit-I. Analysis: The case involved a dispute regarding the utilization of Cenvat Credit on input services taken by unit-II of the appellants for unit-I. The appellants had not registered as Input Service Distributors (ISD) under Rule 4(A) of the Service Tax Rules, 1994. The adjudicating authority confirmed the demand for Cenvat Credit along with interest and imposed a penalty under Rule 15 of the Cenvat Credit Rules. The appellants appealed against this decision, arguing that they had informed the Assistant Commissioner about the job work being done at unit-II, and the failure to register as ISD was a procedural lapse for which substantive benefit should not be denied. The appellants cited relevant case laws to support their contentions. The Advocate for the appellants contended that there was no requirement of law during the relevant period for declaring details of service tax credit, and the adjudication and appellate orders did not provide details of suppression. On the other hand, the Advocate for the Respondent argued that Unit-II was not mentioned in the Central Excise Registration of the party and highlighted that the definition of input service referred to the manufacturer, not the job worker. Additionally, it was argued that the demand was not time-barred as the show cause notice was issued within one year of noticing the violation. The Respondent relied on a relevant case law to support the argument for an extended period. After hearing both parties and examining the records, the Tribunal found that the appellants had duly informed the jurisdictional authority about the job work being done at unit-II. The Tribunal noted that the procedure for registration as an Input Service Distributor came into effect in the middle of the period under consideration. It was acknowledged that there was a nexus between Unit-I and Unit-II, and there was no dispute regarding the admissibility of the credit. The Tribunal cited case laws to support the principle that in cases of procedural irregularity, substantive benefits should not be denied. Consequently, the Tribunal held that the Cenvat Credit was admissible to the appellants, and the appeal was allowed with consequential relief granted to the appellants. In conclusion, the Tribunal ruled in favor of the appellants, allowing the Cenvat Credit on input services taken by unit-II to be utilized by unit-I, emphasizing the importance of substantive benefits not being denied due to procedural lapses.
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