Tribunal allows appeal on cenvat credit denial for bank charges and CA services.

The Tribunal allowed the appeal, setting aside the demand for disallowance and recovery of cenvat credit on bank charges and Chartered Accountant services. It held that the denial of credit based on lack of Input Service Distributor registration for bank charges and incorrect billing for Chartered Accountant services was not legally sustainable. The decision emphasized the significance of proper documentation and compliance with procedural requirements in availing cenvat credit, stating that procedural errors should not result in disallowing legitimate credits.

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Issues:
1. Eligibility of cenvat credit on bank charges and Chartered Accountant services.

Analysis:
The case involved a dispute regarding the eligibility of cenvat credit on bank charges and Chartered Accountant services availed by the appellant, a manufacturer of Bright Bars of various steel types. The appellant was registered with the Central Excise Department and had multiple units, with the specific issue concerning the unit in Ambattur Industrial Estate, Chennai. The Department alleged that the appellant had availed ineligible credit on Bank charges and Chartered Accountant services, leading to the issuance of a show cause notice proposing disallowance and recovery of credit amounting to Rs.16,86,697/- along with interest and penalties. The original authority confirmed the demand, which was upheld by the Commissioner (Appeals), prompting the appellant to file an appeal before the Tribunal.

Bank Charges:
Regarding the denial of credit on bank charges, the Department cited two main reasons. Firstly, it was alleged that the appellant had not obtained Input Service Distributor (ISD) Registration and had not distributed the credit availed on other units to the Ambattur Industrial Estate as required by Rule 7 of Cenvat Credit Rules, 2004. The appellant's counsel argued that the ISD registration requirement was procedural and could not be a basis for denying credit, citing a decision of the jurisdictional High Court of Madras. The Tribunal, following the precedent, held that the denial of credit based on the lack of ISD registration was unfounded and set it aside.

Chartered Accountant Services:
The credit availed on Chartered Accountant services was also challenged by the Department, claiming that the bills were addressed to an individual and other units, making the credit ineligible. The appellant's counsel presented invoices to establish that the bills were indeed issued to the appellant-company and not to an individual or other units. The Tribunal, after reviewing the bills, concluded that the denial of credit on Chartered Accountant services was not justified and needed to be set aside.

Conclusion:
After thorough deliberation, the Tribunal set aside the impugned order, allowing the appeal with consequential relief as per the law. The judgment clarified that the denial of credit based on the lack of ISD registration for bank charges and the alleged incorrect billing for Chartered Accountant services was not legally sustainable. The decision highlighted the importance of proper documentation and adherence to procedural requirements in availing cenvat credit, emphasizing that procedural errors should not lead to the disallowance of legitimate credits.

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