Tribunal allows appeal overturning denial of CENVAT Credit for distribution without ISD registration

The appeal was successful as the Tribunal overturned the order denying CENVAT Credit to the appellant's Chennai Unit due to distribution by the corporate office without ISD registration. The Tribunal relied on past cases and legal interpretations to support the appellant's position that credit distribution through ISD was permissible. The judgment emphasized the procedural nature of ISD registration and upheld the legality of distributing credit before registration. The appeal was allowed, setting aside the initial order.

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Issues:
1. Denial of CENVAT Credit to appellant's Chennai Unit due to distribution by corporate office without ISD registration.
2. Eligibility to avail CENVAT Credit on documents addressed to corporate office.
3. Precedents related to eligibility of CENVAT Credit before ISD registration.
4. Interpretation of law regarding distribution of credit before ISD registration.

Analysis:
The appeal was against an order denying CENVAT Credit to the appellant's Chennai Unit as the credit was distributed by the corporate office without ISD registration. The issue revolved around the nexus of services on which service tax credit was availed. The learned C.A. argued that the credit could be distributed through ISD, and the matter could be resolved on this basis alone.

The Tribunal referred to past cases like Inox Air Products Ltd and Greaves Cotton Ltd, where similar issues were decided in favor of the appellants. It was noted that CENVAT Credit was availed on input services by the corporate office before ISD registration, which was also upheld in the case of Doshion Ltd. The Hon'ble High Court of Gujarat had ruled that non-registration of ISD is a procedural irregularity and does not deny credit. The appellant's Chennai corporate office had availed CENVAT Credit on service tax paid by service providers, which was not distributed to other units. The Circular No. 1063/2/2018-CX dated 16th February, 2018, supported this interpretation.

Based on the above analysis, the impugned order was set aside, and the appeal was allowed. The judgment highlighted the importance of ISD registration and the legality of distributing credit before such registration.

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