2017 (9) TMI 1478 - AT - Central Excise

CENVAT credit - input services - credit was not distributed by their Head Office, for which it was utilized - Held that - it is clearly evident that the appellant had taken the credit in 2005 and utilized the same in 2006 after the invoice date - it is clearly established that even the appellant has taken the credit before issuance of the ISD invoice which was not utilized by them. On the other hand, it is apparent on the face of the records that the credit was utilized after receipt of the ISD invoice - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand of ? 20,84,965/- along with interest and penalty for availing credit wrongly before issuance of ISD invoices.

Analysis:
The appellant, engaged in manufacturing Printing Inks and allied products, faced a Show Cause Notice for irregular Cenvat credit on input service not distributed by their Head Office. The appellant's counsel presented details of credit utilization, showing credit taken in 2005 and utilized in 2006 after the invoice date. The Adjudication order noted discrepancies in the utilization dates and observed that the credit was taken before issuance of the ISD invoice but utilized after receipt. Consequently, the denial of credit was deemed unsustainable, leading to the allowance of the appeal.

This judgment highlights the importance of proper credit utilization in compliance with tax regulations. The case underscores the significance of accurate documentation and adherence to procedural requirements for availing credits. The Tribunal's decision emphasizes the need for meticulous record-keeping and timely utilization of credits to avoid penalties and interest charges. It also showcases the role of legal representation in presenting factual evidence and arguments to support the appellant's case effectively. The ruling serves as a reminder for businesses to maintain transparency in their tax-related transactions and ensure adherence to statutory provisions to avoid legal repercussions.

In conclusion, the judgment resolves the issue of wrongful credit availing before ISD invoice issuance in favor of the appellant based on discrepancies in utilization dates. The decision emphasizes the importance of adherence to procedural requirements and accurate record-keeping in availing tax credits to avoid penalties and interest charges. The ruling underscores the significance of legal representation in presenting a compelling case supported by factual evidence.