2015 (10) TMI 293 - AT - Service Tax

Denial of cenvat credit - GTA services - credit availed by the appellant as a recipient of GTA services discharged by their registered office and distributed to the appellant unit - Held that - Adjudicating authority has denied the credit solely on the ground that their registered office is not authorized to pay service tax on GTA after taking centralized registration at Mumbai. On perusal of the findings, at para 5.51, 5.52 and 5.53, the adjudicating authority has discussed only on the provisions of centralized registration and held that service tax paid by the corporate office is not eligible as cenvat credit availed by the appellant. There is no dispute on the fact that appellant s registered office at Mumbai obtained centralized registration for discharge of service tax on various services including GTA services and discharged service tax. The jurisdictional Service Tax Commissionerate at Mumbai not raised any dispute on the payment of service tax nor any demand issued against them. The registered office is registered as ISD is also not under dispute. The Tribunal in the case of Rohit Surfactants Pvt. Ltd. Vs CCE Jaipur (2012 (12) TMI 612 - CESTAT NEW DELHI), has discussed the identical issue and set aside the impugned order and allowed the appeal. - there is not even iota of dispute raised by the Mumbai Commissionerate on the centralized registration obtained by the registered office of the appellant. - Decided in favour of assessee.

Summary

Issues:
Denial of cenvat credit availed by the appellant as a recipient on Goods Transport Agency Services against input credit distributed by their registered office as ISD.

Analysis:

The appellant, a manufacturer of mosquito repellent, appealed against the order passed by the Commissioner of Central Excise, Puducherry, relating to the denial of cenvat credit amounting to Rs. 10,21,98,632 for the period 2006-08. The issue revolved around the disallowance of credit of Rs. 15,09,987 pertaining to GTA outward transport service distributed by the Input Credit Distributor. The appellant's advocate argued that the appellant correctly availed the credit distributed by their ISD, emphasizing that the jurisdictional authority at the recipient could not question the payment of service tax by the registered office. The Revenue, on the other hand, supported the original order, citing the case of Eveready Industries India Ltd. Vs CCE Chennai. The Tribunal analyzed the submissions and focused on the denial of cenvat credit availed by the appellant as a recipient of GTA services discharged by their registered office. The adjudicating authority had rejected the credit based on the premise that the registered office was not authorized to pay service tax on GTA after obtaining centralized registration at Mumbai. However, the Tribunal noted that there was no dispute regarding the payment of service tax by the registered office or the centralized registration. Relying on the case of Rohit Surfactants Pvt. Ltd. Vs CCE Jaipur, the Tribunal emphasized that the denial of credit based on technical grounds was unjustifiable. Consequently, the impugned order disallowing the cenvat credit pertaining to GTA distributed by the ISD was set aside, and the appeal was allowed.

This judgment highlights the importance of correctly availing cenvat credit and the limitations on the jurisdictional authority to question the admissibility of credit at the recipient's end. The Tribunal's decision in this case underscores the need for a valid legal basis to deny credit and the significance of adherence to procedural requirements. The case law cited by both parties demonstrates the legal precedents influencing the Tribunal's decision and provides a framework for interpreting similar disputes in the future.