By TIOL News Service

MUMBAI, JAN 01, 2015: THE appellant is engaged in the manufacture of natural gases. They have units at various places including Patalganga.

ASCN was issued by the jurisdictional authorities seeking to deny the CENVAT credit on the ground that the invoices under which the credit was availed were either in the name of their head office or in the name of the appellants' other unit at Thane. The demand was confirmed by mentioning that the appellant should have been registered for ISD registration to enable distribution of credit to their respective units; that mere payment is not enough to claim the credit but material evidence should be brought on record that the said services are utilized in the Patalganga unit. The extended time period u/s 11A was invoked.

Before the CESTAT against the order-in-appeal, the appellant produced a sample invoice issued by the CHA agent in the name of their Head Office in respect of clearing charges for goods imported for their Patalganga Unit and also indicated the co-relation between the invoice and the B/E which was in the name of their Patalganga Unit, to prove that the service was indeed received at Patalganga Unit. It is also submitted that in the case of machine repairs, the work is centralized in the Thane Unit for all the units and, therefore, all such invoices are addressed to the Thane Unit. Reliance is placed on the decisions in Modern Petrofils - 2010-TIOL-1204-CESTAT-AHM, Doshion Ltd. - 2013-TIOL-395-CESTAT-AHM & Demosha Chemicals Pvt. Ltd. - 2014-TIOL-534-CESTAT-AHM in support.

The AR after reiterating the findings of the lower authority submitted that it has not been verified as to whether the services had actually been received in the Patalganga Unit.

The Bench observed -

"…The appellant in this case have nine units where the same product is manufactured. Therefore, the doubt of nexus of input and output products will not arise. Ld. Counsel has also shown a particular invoice issued by a CHA in the name of the Head Office. It is quite natural that the service provided by a CHA would be in the name of the Head Office where clearance of goods through Customs will be centralized. I agree that a doubt has never been raised regarding the actual receipt of the services. The only basis for denying credit has been that invoices are either in the name of another unit of the appellant or in the name of their Head Office. The judgments cited above touch upon the issue at hand in support of the case of the appellant. There being no allegation of the service have not been received, the credit stands to be allowed."

The appeal was allowed.

(See 2015-TIOL-08-CESTAT-MUM)