Tribunal Overturns Denial of Credit, Recognizes TR-6 Challan

The Tribunal allowed the appeal, overturning the denial of credit amounting to &8377; 59,53,367/- based on invoices from the Head Office registered as Input Service Distributor. It held that credit distribution by the Head Office without registration does not justify denial. The Tribunal also recognized TR-6 challan as a valid document for credit and directed verification of missing invoices. The matter was remanded for further verification, with instructions to drop certain demands in line with Tribunal decisions, ensuring adherence to legal principles.

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Issues:
1. Denial of credit availed by the appellant based on invoices issued by their Head Office registered as Input Service Distributor.
2. Grounds for denial of credit - invoices issued without Input Service Distributor registration, credit availed on TR-6 challan, and lack of invoices produced by the appellant.

Analysis:

Issue 1: Denial of credit based on invoices from Input Service Distributor
The Tribunal considered the denial of credit amounting to &8377; 59,53,367/- by the appellant based on invoices from their Head Office, registered as Input Service Distributor. The Revenue objected to the credit on the grounds that the invoices were issued before the Head Office's registration as Input Service Distributor. However, the Tribunal referred to previous decisions, including the case of Doshion Ltd. v. CCE, Ahmedabad, where it was held that the distribution of credit by the Head Office without registration cannot be a valid reason for denying the credit.

Issue 2: Grounds for denial of credit
a. TR-6 Challan as a proper document: The Tribunal addressed the second objection raised by the Revenue, emphasizing that TR-6 challan can be considered a valid document for passing on cenvat credit. Citing precedents such as Gaurav Krishna Ispat (I) Pvt. Ltd. v. CCE, Raipur and CCE, Goa v. Essel Pro-Pack Ltd. & Ors., it was established that TR-6 challan is an acceptable basis for availing credit.
b. Verification of missing invoices: The third objection raised by the Revenue pertained to missing invoices. The Tribunal noted that during the interim stage, the Revenue was directed to verify the documents claimed by the appellant to be in their possession. Some invoices were issued by the Head Office during the pre-registration period, requiring further verification by the original adjudicating authority.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for verification of documents related to the missing invoices. For the first and second parts of the demand, covered by Tribunal decisions, the Commissioner was instructed to quantify and drop the same in de novo proceedings. The appeal was disposed of accordingly, ensuring thorough verification and adherence to established legal principles.

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