Appellate Tribunal allows Cenvat credit despite service providers' late registration. Demand notice set aside.

The Appellate Tribunal CESTAT AHMEDABAD ruled in favor of the Appellants, allowing them to avail Cenvat credit of service tax paid on invoices even though the service providers were not initially registered with the department at the time of issuing the invoices. The Tribunal considered the belated registration of service providers and the evidence of payment of service tax submitted by the Appellants, ultimately setting aside the demand notice for recovery of credit, interest, and penalty. The Appeal was allowed, affirming the Appellants' entitlement to the Cenvat credit of service tax paid.

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Issues involved: Eligibility to avail Cenvat credit of service tax paid on invoices where service tax registration number was initially not mentioned but later procured and submitted.

Analysis:
The judgment by the Appellate Tribunal CESTAT AHMEDABAD, delivered by Dr. D.M. Misra, Member (Judicial), pertained to the eligibility of the Appellants to avail Cenvat credit of service tax paid on invoices issued by M/s KLJ Resources Ltd. and M/s V.L. Construction Ltd. during the relevant period. The dispute arose as the service providers were not registered with the department at the time of issuing the invoices. A demand notice was issued for recovery of the credit along with interest and penalty, which was confirmed upon adjudication, leading to the filing of an Appeal by the Appellants. The central issue revolved around whether the belated registration of service providers could be a ground for denial of Cenvat credit, as argued by the ld. Advocate for the Appellant, Shri Vinay Kansara, citing a precedent judgment by the Tribunal in the case of Imagination Technologies India Ltd Vs. C.C.E. Pune III. Additionally, the Appellant had submitted evidence of payment of service tax by M/s KLJ Resources, indicating correct availment of the credit.

The ld. Advocate contended that the details of service tax registration were submitted within a fortnight of the show cause notice, emphasizing that the belated registration should not hinder the Appellants' right to claim Cenvat credit. He also highlighted the deposition of Cenvat credit by M/s KLJ Resources and its inclusion in the ST-3 return for the relevant period. On the other hand, the ld. AR for the Revenue reiterated the findings of the ld. Commissioner (Appeals), maintaining the stance against the Appellants' eligibility for the credit.

After hearing both sides and examining the records, Dr. D.M. Misra found that the issue of eligibility of Cenvat credit in cases where service tax registration number was initially absent but later procured was addressed in the precedent set by the Tribunal in the case of Imagination Technologies India Ltd. Furthermore, the Tribunal noted that the Appellant had paid the entire service tax amount, partly in cash and partly by debiting the Cenvat credit account, as evidenced by the annexures in the Appeal paper book. Consequently, the impugned order was set aside, and the Appeal was allowed with any consequential relief as per the law, affirming the Appellants' entitlement to the Cenvat credit of service tax paid.

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