2009 (7) TMI 130 - AT - Service Tax

Documents for availing cenvat credit - credit taken on invoices in the name of the head office and subsequently endorsed by the head office Commissioner (Appeals) allowed the credit stating that the credit taken on invoices in the name of the head office and subsequently endorsed by the head office as correct. I also agree with the submissions of the appellants that the appellants being the only manufacturing unit, the head office could not fall in the category of input service distributor. Accordingly I set aside the impugned order to the extent of demand of duty on credit availed on invoices issued in the name of head office along with interest and the equivalent penalty. held that there is no dispute about the input services received by the assessee. The substantive benefit cannot be denied on the procedural grounds credit allowed.

Summary

Issues:
- Dispute over credit availed on invoices issued in the name of head office and subsequently endorsed by the head office.
- Technical grounds raised by Revenue regarding documents not in the name of the assessee's factory.

Analysis:
1. Dispute over Credit Availed on Invoices:
The case involved a dispute regarding the credit availed on invoices issued in the name of the head office and later endorsed by the head office. The Commissioner (Appeals) referred to Circular No. 211/45/96-CX and previous tribunal decisions to support the allowance of credit in such cases. The Commissioner held that as long as the invoices were endorsed by the head office in favor of the appellants, the credit should not be denied. The Commissioner also emphasized that since the head office and the appellants were part of the same entity, the credit availed on such invoices was valid. This decision was based on the principle established in previous tribunal rulings like Eveready Inds. India Ltd. and Tata Iron & Steel Co. Ltd.

2. Technical Grounds Raised by Revenue:
The Revenue raised technical grounds, arguing that the documents were not in the name of the assessee's factory in Silvassa but were issued in the name of the head office in Mumbai. However, the Tribunal noted that there was no dispute regarding the actual input services received by the assessee. The Tribunal emphasized that substantive benefits should not be denied based solely on procedural grounds. In this context, the Tribunal found no fault with the view taken by the Commissioner (Appeals) and rejected the appeal filed by the Revenue. The Tribunal's decision highlighted the importance of focusing on the substance of the transactions rather than technicalities when determining the eligibility for availing credit on input services.

In conclusion, the judgment by the Appellate Tribunal CESTAT, Ahmedabad upheld the decision of the Commissioner (Appeals) regarding the credit availed on invoices issued in the name of the head office and subsequently endorsed by the head office. The Tribunal emphasized the validity of such credit based on previous rulings and the entity relationship between the head office and the appellants. Additionally, the Tribunal rejected the Revenue's appeal based on technical grounds, emphasizing the importance of substantive benefits over procedural discrepancies in determining eligibility for availing credit on input services.