2020 (1) TMI 758 - AT - Central Excise

CENVAT Credit - input service distribution - Credit distributed by their head office as ISD is denied - input services or not - HELD THAT - As it is not disputed at the end of the head office therefore the admissibility of Cenvat credit cannot be disputed at the end of the appellant. Therefore the appellant is entitled to avail the Cenvat credit on the disputed services in question and accordingly the impugned order is set aside - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of Cenvat Credit by head office acting as ISD for distribution to appellant; Dispute regarding qualification of certain services as Input Services under Cenvat Credit Rules, 2004; Incomplete details on invoices as per Rule 9 of Cenvat Credit Rules, 2004.

Analysis:
The appellant, engaged in manufacturing, appealed against the denial of Cenvat Credit distributed by their head office acting as an Input Service Distributor (ISD). The head office availed services and distributed service tax paid on them to the appellant. The issue arose when the appellant sought credit for services like 'Construction Service' and 'Building Maintenance Service,' which the Revenue sought to deny, claiming they did not qualify as Input Services under Rule 2(l) of Cenvat Credit Rules, 2004. Additionally, incomplete details on invoices were noted as per Rule 9 of the Cenvat Credit Rules, 2004.

The appellant argued that since the head office's availing of Cenvat credit was not disputed, the credit could not be denied to them. They cited a precedent from the Tribunal to support their contention. On the other hand, the Authorized Representative for the Revenue reiterated the findings in the impugned order.

The Tribunal examined the issue and referred to a previous case involving a similar matter. It was observed that the appellant was entitled to avail Cenvat credit since the distribution of credit was not disputed, as per Rule 3 of the Cenvat Credit Rules, 2004. The Tribunal also referenced a decision of the Bombay High Court regarding the distribution of credit by an ISD.

Referring to Rule 7 of the Cenvat Credit Rules, the Tribunal held that the admissibility of Cenvat Credit by the appellant could not be disputed at that stage, especially since it was not disputed by the head office. Consequently, the impugned order was set aside, and the appellant was allowed to avail the Cenvat credit on the disputed services in question, granting them consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, allowing them to avail the Cenvat credit that was previously denied, based on the established precedents and rules governing the distribution and availment of Cenvat credit under the Cenvat Credit Rules, 2004.