Tribunal allows Cenvat Credit for services pre-registration

The tribunal ruled in favor of the appellants in a case concerning the eligibility to claim Cenvat Credit on services received before registration. The appellants, engaged in logistic services, were allowed to avail the credit post-registration at the ICD, despite registration occurring after the service period. The tribunal rejected the Revenue's argument on input service credit distribution, emphasizing that registration was not a prerequisite for claiming credit. Relying on precedent cases, the tribunal set aside the previous order, granting relief to the appellants.

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Issues:
Availment of Cenvat Credit prior to registration of the unit.

Analysis:
The case involved a dispute regarding the eligibility of the appellants to claim Cenvat Credit on service received prior to their registration. The appellants, engaged in providing logistic services, constructed an Internal Container Depot (ICD) and took registration after the completion of construction. The Revenue contended that since the registration was obtained after the construction period, the appellants were not entitled to Cenvat Credit on services received before registration. The appellants argued that they could not have applied for registration during the construction phase when no services were being provided from the ICD. They clarified that the credit was taken for the first time post-registration at the ICD, and there was no time limit for claiming credit based on the service provider's invoice.

The Revenue suggested that the case involved the distribution of input service credit, emphasizing that the Mumbai office should have registered as an input service distributor and passed on the credit to the ICD. However, the tribunal disagreed, stating that the entire credit for the ICD construction activity was taken at the ICD itself, and it was not feasible to claim credit before commencing operations.

The tribunal referred to various decisions, including Doshion Ltd. vs. CCE, Dorling Kindersley (I) Pvt. Ltd. vs. CCE, CST, Bangalore vs. Kyocera Wireless (I) Pvt. Ltd. vs. CCE & ST, and mPortal India Wireless Solutions P Ltd. vs. CST Bangalore. These decisions collectively established that registration with the department was not a prerequisite for claiming credit. Consequently, the tribunal ruled in favor of the appellants, setting aside the impugned order and allowing the appeal with consequential relief.

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