2014 (10) TMI 895 - AT - Service Tax

Tribunal Overturns Denial of Credit, Recognizes TR-6 Challan

Bhansali Engg. Polymers Ltd. Versus Commissioner of C. Ex., Bhopal

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 ... Denial of Cenvat credit - Availed on the basis of invoices issued by their head office registered as Input Service Distributor - Revenue contended that invoices issued were when the Head Office was not registered as Input Service Distributor, the credit has been availed on the basis of TR-6 challan and there are no invoices produced by the appellant, in some of the cases. Held that:- by relying on the decision of Tribunal in the case of Doshion Ltd. v. CCE, Ahmedabad [2012 (10) TMI 952 - CESTAT AHMEDABAD], the distribution of credit by the Head Office without taking the registration, cannot be adopted as a ground for denial of the credit. By referring to the decision of Tribunal in the case of Gaurav Krishna Ispat (I) Pvt. Ltd. v. CCE, Raipur [ 2008 (10) TMI 22 - CESTAT NEW DELHI] and also in the case of CCE, Goa v. Essel Pro-Pack Ltd. & Ors. [2007 (9) TMI 43 - CESTAT, MUMBAI], TR-6 challan can be considered to be a proper document for passing on the cenvat credit. As regards the third objection of the Revenue. It is seen that during the interim stage, Revenue was directed to verify the documents which the appellant contended to be with them and give a report. Some of the invoices issued by the provider Head Office were for pre-registration period. Inasmuch as the said aspect needs verification, we deem it fit for the original adjudicating authority to do so. Therefore, the impugned order is set aside and matter is remanded back to the original adjudicating authority for verification of the documents relatable to the third part of the demand. - Appeal disposed of 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 DistributorThe 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 credita. 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.