By TIOL News Service

NEW DELHI, SEPT 19, 2015: THE appellant is a manufacturer of Ball Bearing and has three units at Jaipur, Manesar and Newai, Head Office being at Jaipur. They availed credit of tax paid on the following services viz. Selling Commission, Royalty, Consultancy & Professional, Banking Charges, Audit Fee, AMC Charges etc.

In all these cases, the service providers raised invoices in the name of the Head Office. The Jaipur unit of the appellant took CENVAT Credit on all these services.

The case of the Revenue is that as their head office is not registered as Input Service distributor (ISD), therefore, Jaipur unit is not entitled to take CENVATCredit on these services. It is also the case of Revenue that all the services in question have not been utilized by Jaipur unit and hence, they could not have taken all the credit.

SCNs were issued to deny the CENVAT credit for the period February 2006 to March 2009.

The demands were confirmed along with imposition of interest and penalty and, therefore, the appellant is before the CESTAT.

It is submitted that it is not the case of the Revenue that the services were not utilized by the appellant or for that matter that the services are not Input Services as defined in rule 2(l) of CCR, 2004; that merely having no registration as Input Service Distributor does not effect the entitlement of CENVAT Credit to them. Support is derived from the following decisions - Demosha Chemicals Pvt. Ltd. 2014-TIOL-534-CESTAT-AHM , Doshion Ltd. 2013-TIOL-395-CESTAT-AHM & Greaves Cotton Ltd. 2014-TIOL-1519-CESTAT-MAD .

The AR submitted that the appellant is entitled to take Credit only on the services that have been used by them in their factory as per Rule 2(l) of the CCR, 2004; there is a rule framed for availment of CENVAT Credit and appellant has not followed the procedure under Rules, therefore, they are not entitled to take Cenvat Credit. Reliance is placed on the decisions in Nicholas Piramal (India) Ltd. 2009-TIOL-649-HC-MUM-CX & Mangalore Chemicals & Fertilizers Ltd. 2002-TIOL-234-SC-CX .

The Bench observed that the issue as to whether non-registration as Input Service distributor can be fatal for denial of Cenvat Credit to the appellant had come up before the Tribunal in the case of Demosha Chemicals Pvt. Ltd. (supra) & Doshion Ltd. (supra) and wherein it was held that credit cannot be denied even in the absence of registration of the Head Office as ISD.

After extracting the ratio of both the decisions and observing that the case laws cited by the AR are not applicable to the facts on hand, the Bench held that the appellant had correctly taken CENVAT Credit on the services namely Selling Commission, Royalty, Consultancy & Professional, Banking Charges, Audit Fee, AMC Charges, etc.

The order was set aside and the Appeal was allowed with consequential relief.

(See 2015-TIOL-1976-CESTAT-DEL)