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2016 (7) TMI 1706 - AT - Service TaxDenial of CENVAT Credit - services received by General Manager Office and other units - no inter-connectivity between input service and outdoor services - HELD THAT - On identical issue the case of the appellant came up before the Chennai Bench of this Tribunal in M/S BSNL, SALEM VERSUS CCE, SALEM 2013 (1) TMI 142 - CESTAT CHENNAI and this Tribunal has observed 'Since Modvat credit is a substantial benefit, we are of the view that the impugned credit should not be denied on account of procedural defects of minor nature as pointed out by the Revenue.' Conclusion - Modvat credit is a substantial benefit and should not be denied due to minor procedural defects. Appeal allowed.
The Appellate Tribunal CESTAT Chandigarh, comprising Hon'ble Mr. Ashok Jindal and Hon'ble Mr. Venkitkrishnan Padmanabhan, adjudicated an appeal concerning the denial of Cenvat credit amounting to Rs. 25,82,82,437/- to the appellant. The appellant, represented by Sh. Manish Gaur and Sh. Amar Partap, contested the impugned order which imposed interest and penalties, arguing that the credit was wrongly denied.
The core issue revolved around the appellant's entitlement to Cenvat credit for services received by its General Manager Office and other units, which the revenue argued lacked "inter-connectivity between input service and outdoor services." The appellant cited precedent cases, including a decision by the Chennai Bench of the Tribunal, which had previously ruled in their favor. The Tribunal, after hearing both parties, referenced the Chennai Bench's findings, which emphasized procedural compliance over substantive misuse of credit. It was noted that the credit distribution followed proper registration as an 'Input Service Distributor,' and there was no mis-utilization of ineligible credit. The Tribunal highlighted that "Modvat credit is a substantial benefit" and should not be denied due to minor procedural defects. Concluding that the issue was "no more res-integra," the Tribunal found no merit in the impugned order, set it aside, and allowed the appeal, thus upholding the appellant's entitlement to the Cenvat credit.
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