Tribunal grants CENVAT credit despite lack of ISD registration, emphasizes service relevance. Verification ordered for credit reversal.

The Tribunal allowed the appellant's claim for CENVAT credit for services availed by the head office, despite the absence of Input Service Distributor (ISD) registration. The Tribunal emphasized that denial of credit would be unjust as the services were genuine and relevant to the business. The appellant was deemed entitled to the credit for the period before 1.4.2008. The Tribunal directed verification of credit reversal from 1.4.2008 to 31.12.2008, with legal consequences to follow based on the findings, and partially allowed the appeal.

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Issues:
Claim of CENVAT credit for services availed by the appellant's head office, denial of credit due to lack of Input Service Distributor (ISD) registration, the impact of law amendment from 1.4.2008 on CENVAT credit for GTA services, the procedural requirement of ISD registration, entitlement to distribution of service tax credit, verification of credit reversal from 1.4.2008 to 31.12.2008.

Analysis:

1. The appellant claimed CENVAT credit for services availed by the head office, which the department denied due to the absence of ISD registration. The services included inward and outward freight charges, telephone charges, and courier/postage charges. The appellant argued that denial of credit would be unjust as the services were genuine and relevant to their business.

2. The appellant highlighted that the period for the CENVAT credit claim was from 1.1.2005 to 31.12.2008. They did not avail the credit for GTA services post the law amendment from 1.4.2008, which introduced a reverse charge mechanism. The appellant emphasized that ISD registration is a procedural requirement, and the denial of CENVAT credit would go against the interest of justice.

3. The Revenue contended that without ISD registration, the appellant's head office could not distribute the credit of service tax paid. However, the Tribunal noted that the law permits CENVAT credit for service tax paid on GTA services. The Tribunal found no dispute regarding the services availed or the payment of service tax, and denying the credit would be unjust.

4. The Tribunal emphasized that registration is a regulatory measure to ensure compliance with the law, but even without registration, the tax liability remains unchanged. Denying the distribution of CENVAT credit during the unregistered period would be inconsistent with the law. Therefore, the appellant was deemed entitled to the CENVAT credit for the period before 1.4.2008.

5. Regarding the credit reversal from 1.4.2008 to 31.12.2008, the Tribunal directed the authority to verify the same and the appellant to cooperate. Based on the verification findings, the appropriate legal consequences would follow. The Tribunal partially allowed the appeal, directing the appellant to follow the indicated steps.

This comprehensive analysis of the judgment addresses the key issues involved in the case, including the denial of CENVAT credit, the significance of ISD registration, the impact of law amendments, and the procedural requirements for claiming tax credits.

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