Luminous Power Technologies Pvt Ltd Vs Commissioner of Central Goods & Service Tax (CESTAT Chandigarh)
The appeal before CESTAT Chandigarh challenged the order dated 28.03.2018 passed by the Commissioner of GST, Chandigarh, denying CENVAT credit of Rs. 77,25,604 availed on service tax paid on Goods Transport Agency (GTA) services under Rule 14 of the CENVAT Credit Rules, 2004. The credit was denied on the ground that the appellant’s Head Office, which distributed the credit to manufacturing units, was not registered as an Input Service Distributor (ISD).
The appellant submitted that the Head Office paid service tax under the reverse charge mechanism on behalf of all manufacturing units through a consolidated challan and thereafter distributed the credit to the respective units. The appellant availed the credit based on e-payment receipts received from the Head Office. It was argued that under Rule 2(m) of the CENVAT Credit Rules, an Input Service Distributor is an office of the manufacturer or producer receiving invoices for input services and issuing bills or challans for distribution of credit. The appellant further submitted that, with effect from 01.04.2005, the recipient of the service was required to be registered under the Act and, from 02.01.2006, centralized registration was extended to service recipients. Accordingly, the Head Office had obtained centralized registration for payment of service tax under the reverse charge mechanism. It was contended that the appellant was entitled to CENVAT credit under Rules 3 and 4(7) of the CENVAT Credit Rules and that Rule 9(1)(e) specifically recognizes a challan as a valid document for availing credit.
