Tribunal grants input service credit to appellant in shared registration dispute

The Tribunal ruled in favor of the appellant in a dispute over input service credit availed from two service providers sharing a common registration number. The appellant, engaged in Insurance Auxiliary Service, successfully argued that denial of credit based on the shared registration number was unjustified since both providers were under the same proprietorship, initially had a common registration, and M/s. Allied Risk Management had paid service tax collected from the appellant. The Tribunal set aside the lower authorities' decision, allowing the appeal and granting consequential relief to the appellant.

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Issues: Dispute over input service credit availed by appellant from two service providers with a common registration number.

Analysis:
1. Issue of Input Service Credit: The appellant, engaged in providing Insurance Auxiliary Service, availed input service credit from two service providers, M/s. Allied Risk Management and M/s. Amit Associates, both being proprietary concerns of Mr. Amit Dhruva. The dispute arose when the Revenue contended that the input services from M/s. Allied Risk Management were not eligible due to sharing a registration number with M/s. Amit Associates. A show cause notice was issued for denial of credit amounting to Rs. 2,04,189 availed during April 2009 to September 2009.

2. Contentions of the Appellant: The appellant argued that both service providers were under the same proprietor, Mr. Amit Dhruva, and were initially allotted a common registration number by the Service Tax department. They further explained that both firms operated under the same PAN card, paid service tax, and filed returns under one service code number. It was only later that M/s. Allied Risk Management obtained a separate registration. The appellant contended that since M/s. Allied Risk Management had paid service tax under the common registration number without objection from the Revenue, they should not be denied credit.

3. Decision and Reasoning: The lower authorities rejected the appellant's plea, stating that the invoices from M/s. Allied Risk Management, under the shared registration number, were not valid for availing credit. However, the Tribunal found that both firms were indeed under the same proprietorship, had a common registration initially, and M/s. Allied Risk Management had paid service tax collected from the appellant. The Tribunal concluded that denying credit based on the shared registration number, especially when the Revenue had not objected earlier, was unjustified. Therefore, the impugned orders were set aside, and the appeal was allowed in favor of the appellant with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the common ownership of the service providers and the payment of service tax by M/s. Allied Risk Management. The decision highlighted the unjust nature of denying credit based on the shared registration number, especially when the Revenue had previously accepted the arrangement.

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