2017 (2) TMI 91 - AT - Central Excise

Distribution of CENVAT credit - registration of dealer - whether centralized registration can be equated with the ISD registration in terms of Rule 2 (m) of and Rule 7 of CCR 2004 read with Rule 4A (2) of STR, 1944 - Held that - such non-registration as ISD is only a procedural irregularity, nonetheless, it is a curable defect. Hence availment of distribution of credit cannot be denied based on interpretation of law - credit allowed. CENVAT credit - GTA services - whether outward transportation, upto the place of removal was not eligible for cenvat credit? - Held that - the matter is being remanded to original authority for de novo consideration to decide the issue in the light of statutory provisions as also as per the ratio of judgement and decisions of higher appellate forums with regard to eligibility of such credits availed on outward transportation - matter on remand. Appeal disposed off - decided partly in favor of appellant and part matter on remand.

Summary

Issues Involved:
1. Availment of input service credit based on centralized registration.
2. Availment of cenvat credit on outward freight.

Issue 1: Availment of input service credit based on centralized registration:
The first issue in this dispute concerns the availment of input service credit amounting to ?15,45,000 based on invoices issued by M/s.Forech India Ltd. holding centralized registration. The Department contended that centralized registration cannot be equated with ISD registration as per Rule 2 (m) and Rule 7 of Cenvat Credit Rules 2004 read with Rule 4A (2) of Service Tax Rules, 1944.

Analysis: The appellant argued that the distribution of credit without registration as ISD is a procedural shortcoming and should not disentitle the availment of cenvat credit. They relied on decisions of the Hon’ble High Courts of Gujarat and Rajasthan supporting this view. The Tribunal agreed with this argument, stating that non-registration as ISD is a curable defect and does not warrant denial of credit. The Tribunal cited previous decisions supporting this stance and set aside the part of the impugned order denying the input service credit.

Issue 2: Availment of cenvat credit on outward freight:
The second issue revolves around the availment of cenvat credit amounting to ?4,80,203 on service tax paid on outward freight from 1.8.2001 to 27.3.2012. The Department contended that GTA outward transportation up to the place of removal was not eligible for cenvat credit. The Show Cause Notice proposing recovery of these amounts was upheld by the lower appellate authority.

Analysis: During the hearing, the appellant acknowledged that the disputed transportation services also included transportation to depots and job workers, contrary to the earlier presumption. The appellant requested a remand of this issue back to the original authority for reevaluation considering this new information. The Tribunal, with the consent of both parties, decided to remand the matter to the original authority for de novo consideration in light of statutory provisions and relevant judgments, ensuring the appellant is given an opportunity to present supporting documents and evidence.

In conclusion, the Tribunal allowed the appeal, setting aside the denial of input service credit and remanding the issue of cenvat credit on outward transportation for further consideration. The judgment emphasizes the curable nature of procedural irregularities in availing credits and the importance of adherence to statutory provisions and legal precedents in such matters.