TMI Blog2022 (4) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court of Gujarat in the case COMMISSIONER OF CENTRAL EXCISE VERSUS DASHION LTD [ 2016 (2) TMI 183 - GUJARAT HIGH COURT] , which has been accepted by the Department in terms of the Circular dated 16.02.2018 - It was held in the case that there is nothing in the said Rules of 2005 or in the Rules of 2004 which would automatically and without any additional reasons disentitle an input service distributor from availing Cenvat credit unless and until such registration was applied and granted. The CENVAT Credit claimed by the respondent-assessee on the basis of the Invoices/Debit notes issued by the head office for the months of March, July and August 2006 prior to its registration as ISD on 21.09.2006 being procedural irregularity and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation of the scheme and recorded perverse finding? 3. The respondent/assessee is registered taxable provider of services and is registered with the jurisdictional service authorities for providing taxable services. 4. During the course of audit of the service tax records of the assessee, the department having found that the assessee has availed and utilized CENVAT credit on input services based on invoices/debit notes issued by the head office during March, July and August 2006 but the head office having got registered under the Service Tax [Registration of Special Category of Persons] Rules, 2005 [ Rules for short] as Input Service Distributor [ISD] on 21.09.2006, issued show-cause notice. The Commissioner after considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce on the judgment of the Hon'ble High Court of Gujarat in the case of Commissioner of Central Excise V/s. Dashion Ltd., [2016 [41] S.T.R. 884 (Guj.)] and the Circular dated 16.02.2018 issued by the Ministry of Finance [Department of Revenue], Central Board of Excise Customs, New Delhi. Further, the order of the Hon'ble High Court of Madras in the case of The Commissioner of Central Excise V/s. M/s. Pricol Ltd., [2021 TIOL 331 HC-MAD-CX] was referred, to contend that the Rules would not disentitle an ISD from availing CENVAT Credit unless and until such registration was applied and granted. It was argued that the requirement of registration under the Rules was procedural and curable. The judgment of the Hon'ble High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent as curable. Particularly when it was found that full records were maintained and the irregularity, if at all, was procedural and when it was further found that the records were available for the Revenue to verify the correctness, the Tribunal, in our opinion, rightly did not disentitle the assessee from the entire Cenvat credit availed for payment of duty. Question No.1 therefore shall have to be answered in favour of the respondent and against the assessee. 9. Considering this judgment, the Department in the Circular dated 16.02.2018, has observed thus: 2.(a) Decision of the Hon ble High Court of Gujarat dated 08.01.2016 in the matter of Commissioner of Central Excise v. Dashion Ltd in Tax Appeal No. 415 of 2013 662 of 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the show cause notice itself, the adjudicating authority had referred to sub-rule (3) of Rule 15 of the Rules of 2004 as basis for such proposal. Two primary objections of the Department were that the assessee had not registered itself under the Service Tax (Registration of Special Category of Persons), Rules 2005 and that the tax credit from one unit was utilized for discharging tax liability of another unit instead of pro rata distribution amongst different units. The adjudicating authority confirmed the duty demands with interest and penalties. 2.4 Therefore, the points of law examined were that the assessee had utilized credit from one unit for the purpose of duty liability of its other unit without pro rata distribution by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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