2021 (3) TMI 1168 - AT - Service Tax

CENVAT Credit - input service distribution - tour operator service - entitlement of credit to ISD when the credit has been availed by the unit company - HELD THAT - Admittedly, the very issue of denying credit availed on input service in the nature of tour operator service, provided to their dealers as an encouragement, has already been decided by this Bench in appellant own case M/S. CHETTINAD CEMENTS CORPORATION PVT. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE CHENNAI NORTH 2019 (10) TMI 10 - CESTAT CHENNAI . It is also not in dispute that the appellant is only an Input Service Distributor who only distributed the credit. The appeal of the assessee stands allowed.

Summary

Issues:
1. Whether the demand raised alleging that the credit availed on input services in the nature of tour operator service is eligible or not.
2. Whether the demand can be raised against the Input Service Distributor (ISD) alleging wrong availment of credit when the credit has been availed by the unit company and the ISD has only distributed the credit.

Issue 1:
The issue of denying credit availed on input service in the nature of tour operator service, provided to dealers as an encouragement, was discussed. The appellant, being an ISD, had only distributed the credit. The Bench referred to an earlier order where it was held that such tour operator services given as an incentive to dealers are eligible for credit. The Show Cause Notice was against the appellant-company as an ISD, and it was concluded that the demand raised against the ISD could not be sustained. Citing judicial precedents, the impugned order was set aside, and the appeal was allowed with consequential relief.

Issue 2:
The judgment reiterated that the appellant, as an ISD, had only distributed the credit and did not avail it directly. The Bench found no reason to deviate from the earlier view where a similar issue was decided in favor of the appellant. It was emphasized that the appellant's situation was almost identical to the previous case. Following judicial precedents and considering the facts, the appeal of the assessee was allowed with consequential benefits as per law.

In conclusion, the judgment addressed the issues related to the eligibility of credit availed on input services and the liability of an Input Service Distributor in distributing such credit. The decision was based on previous rulings and legal precedents, ultimately allowing the appeal in favor of the assessee.