Unifrax India Ltd Vs C.C.E. & S.T.-Bhavnagar (CESTAT Ahmedabad)
CESTAT Ahmedabad held that CENVAT Credit on ISD invoice issued without obtaining ISD registration is allowable as payment of service tax on services received not disputed.
Facts- The issues involved in the present matter is whether the appellant is liable to reverse the CENVAT Credit distributed by its head office prior to its registration as Input Service Distributor and whether the HO (registered as ISD) of the appellant while distributing 100% of the credit to a single unit has contravened the mandate under Rule 7 (d) of CENVAT Credit Rules, 2004 (as existed during the relevant period).
Conclusion- Held that there is no dispute about the payment of Service Tax on the service received by the appellant. Therefore, merely because the ISD invoice was issued without having registration of the appellant’s head office, the fact of the payment of Service Tax will not get extinguished. Hence the credit cannot be disallowed.
Held that before the amendment was carried out in the year 2016, the assessee was given the option to distribute the CENVAT Credit to one unit or also to other unit, and provision for proportionate credit was brought only post amendment of 2016. Therefore, it is at the option of the head office whether it wanted to distribute the credit to the appellant only or to distribute it to other units. Therefore, in view of existing provisions of CENVAT Credit Rules, 2004 during relevant period, we are of the view that the 100% credit availed by the appellant is in order in terms of Rule 2007, existing at the relevant time.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The following issues involved in the present case:
(A) Whether the appellant is liable to reverse the CENVAT Credit distributed by its head office prior to its registration as Input Service Distributor?
(B) Whether the HO (registered as ISD) of the appellant while distributing 100% of the credit to a single unit has contravened the mandate under Rule 7 (d) of CENVAT Credit Rules, 2004 (as existed during the relevant period)?
2. Shri Jigar Shah, learned Counsel appearing on behalf of the appellant submits that as regard the issue (A) that whether the CENVAT Credit which was distributed by their head office prior to its registration as Input Service Distributor, the issue is no longer res integra as in the following judgments, it has been consistently held that prior to registration of ISD credit can be passed on to the manufacturing unit:
