By TIOL News Service

AHMEDABAD, APR 02, 2016: THE Adjudicating authority disallowed the CENVAT credit of Rs.27.89 lakhs and imposed penalty & interest on the ground that the appellant had availed credit on the basis of invoices, which were not in their name.

As the Commissioner (Appeals) upheld this order, the appellant is before the CESTAT.

It is submitted that their head office is registered as Input Service Distributor & they had availed credit on the basis of the invoice issued by ISD. Reliance is placed on the decisions in United Phosphorous Limited - 2013-TIOL-793-CESTAT-AHM and Elder Pharmaceuticals Ltd. - 2014-TIOL-2071-CESTAT-MUM to justify that the credit had been rightly availed.

The AR while supporting the order of the lower authorities emphasized that the Appellant has other branches and the head office had taken credit on the strength of invoices bearing the name of the other branches.

The Bench noted that the Appellant had taken a definite stand that they have taken credit on the basis of the invoices issued by the ISD and which were also produced but the lower authorities had ignored examining the same.

The CESTAT further observed -

+ It is well settled by the various decisions of the Tribunal, that the jurisdictional officer of recipient of input/input service credit, is not competent to adjudicate ISD invoice over the jurisdictional officer of Input Service Distributor (ISD), who is competent to decide this matter.

+ So, if the Appellant availed the credit on the basis of the invoices issued by the ISD, the Adjudicating authority cannot deny the credit.

However, noting that there is a factual dispute and which is required to be examined by the Adjudicating authority, the impugned order was set aside and the matter was remanded.

The appeal was disposed of.

(See 2016-TIOL-421-CESTAT-AHM)