2019 (6) TMI 825 - AT - Central Excise

CENVAT credit - input services - Security Services - Renting of Immovable Property - CHA Services - Courier Services - denial of credit on the ground that the appellant having not been registered as an Input Service Distributor (ISD), the input Credit was alleged to be ineligible - HELD THAT - The very same issue came up in the assessee s own case on an earlier occasion before this Bench LEO PRIMECOMP PVT. LTD., (UNIT-II) VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI-IV 2016 (9) TMI 193 - CESTAT CHENNAI where the Bench had thought it fit to remand the matter back to the file of the adjudicating authority on the doubt raised by the Ld. Department Representative as to the non-registration of the appellant as an ISD. In the present case, the Revenue has not disputed as to the maintenance of necessary records, but the Credit is denied only because of non-registration of ISD - since this Bench has remanded the matter back to the file of the adjudicating authority in the assessee s own case, I also deem it proper to remand this matter for fresh adjudication. Appeal allowed in part by way of remand.

Summary

Issues Involved:
1. Availment of CENVAT Credit on various services without being registered as an Input Service Distributor (ISD).

Analysis:
The judgment pertains to a dispute regarding the appellant, a manufacturer of Parts of Fuel Injection Pumps and Parts of ATM Machines, availing CENVAT Credit of service tax paid on Security Services, Renting of Immovable Property, CHA Services, and Courier Services without being registered as an ISD for the period from June 2014 to May 2015. The Revenue alleged that the input Credit was ineligible due to non-registration as an ISD. A Show Cause Notice was issued, leading to an adjudication Order confirming the proposals, which was upheld by the impugned Order-in-Appeal. The appellant challenged this decision by filing an appeal before the forum.

Upon hearing the arguments from both sides, the Member (Judicial) considered the previous decision of the Bench in the appellant's own case, where a doubt was raised regarding the non-registration of the appellant as an ISD. However, subsequent developments, including judgments by the High Courts of Gujarat and Rajasthan, clarified that non-registration of ISD was a procedural irregularity for which substantial benefit of CENVAT Credit could not be denied if all necessary records were maintained. The CBEC also accepted these decisions. The Revenue did not dispute the maintenance of necessary records but denied the Credit solely due to non-registration as an ISD.

Given the developments and the acceptance of the above decisions, the Member (Judicial) deemed it appropriate to remand the matter for fresh adjudication in light of the observations made regarding the later developments. Despite the remand, no penalty was imposed in line with the Board's acceptance. Consequently, the appeal was partly allowed under the specified terms.

In conclusion, the judgment provides clarity on the issue of availing CENVAT Credit without ISD registration based on subsequent legal developments and decisions, ultimately leading to a remand for fresh adjudication without imposing any penalty.