2017 (2) TMI 836 - AT - Central Excise

CENVAT credit - GTA service - inward freight - whether the appellants are eligible to CENVAT credit on the service tax paid on Goods Transport Agency services (inward freight)? - Held that - to avail CENVAT credit registration of Head Office as an input service distributor cannot be insistent upon - there is no doubt about the fact that the appellant has discharged the service tax against GAR-7 challans prescribed documents under Rule 9 of CENVAT Credit Rules 2004 in availing the CENVAT credit - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Admissibility of CENVAT credit on Goods Transport Agency services (inward freight).
2. Correlation of duty paying documents with corresponding invoices.
3. Requirement of registration as an input service distributor for availing CENVAT credit.

Analysis:
1. The appeal challenged an Order-in-Appeal confirming a demand notice against the appellants for availing CENVAT credit on inward freight services. The appellants contended that they paid service tax on receiving GTA services as required under Service Tax Rules. The dispute centered on the denial of credit due to invoices being in the name of the Head Office, despite correlating GAR-7 challans with transporter's invoices. The appellant relied on a Gujarat High Court judgment to support their case.

2. The Revenue rejected the appellants' contention due to insufficient evidence correlating duty paying documents with transporter's invoices. The appellants, in their rejoinder, emphasized submitting written submissions to the Commissioner (Appeals) correlating service tax payments with relevant invoices. The Tribunal observed that the liability of service tax on inward freight was discharged by the appellants against GAR-7 challans, as required by law.

3. The Tribunal analyzed the requirement of registration as an input service distributor for availing CENVAT credit. Referring to the Gujarat High Court judgment, the Tribunal held that registration of the Head Office as an input service distributor was not mandatory for claiming CENVAT credit. The Tribunal found that the appellants had adequately substantiated their case through written submissions, establishing the correlation between service tax payments and duty paying documents.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief as per law. The judgment clarified the admissibility of CENVAT credit on GTA services, emphasizing compliance with service tax rules and the sufficiency of evidence in correlating duty paying documents with invoices.