CENVAT credit cannot be denied for procedural defects in invoices or ISD registration when eligible input-service credit is proved.

CENVAT credit was not denied where supporting invoices were photocopies and the head office issued only a distribution statement, because no evidence showed double availment and the relevant particulars were available for verification. The absence of Input Service Distributor registration at the time of distribution was also treated as a procedural lapse, since service tax had been paid on the input services and no excess or duplicate credit was established. The operative principle is that substantive credit cannot be refused for documentation or registration defects when eligible input-service credit and its proper distribution are otherwise proved.

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Issues: (i) Whether CENVAT credit could be denied on the ground that the supporting invoices were photocopies and the head office had issued only a statement of distribution. (ii) Whether CENVAT credit distributed by the head office before obtaining Input Service Distributor registration was inadmissible.

Issue (i): Whether CENVAT credit could be denied on the ground that the supporting invoices were photocopies and the head office had issued only a statement of distribution.

Analysis: The credit was rejected on a presumption of possible double availment by other units, but no such allegation was made in the show cause notice and no supporting evidence was brought on record. The head office had distributed the credit to the appellant unit, and any objection to the invoices at source would lie with the jurisdictional authority of the head office. The statement issued for distribution contained the relevant particulars and was treated as a valid document for credit purposes. The defect, if any, was procedural and did not justify denial of substantive credit.

Conclusion: The credit could not be denied on this ground and the issue was decided in favour of the assessee.

Issue (ii): Whether CENVAT credit distributed by the head office before obtaining Input Service Distributor registration was inadmissible.

Analysis: The record showed that service tax had been paid on the input services and the credit was distributed by the head office. The department did not establish that the same credit was passed on to more than one manufacturing unit or that excess credit had been distributed. The absence of Input Service Distributor registration was held to be a procedural lapse, and the post-facto registration position did not alter the admissibility of credit already distributed on the basis of the relevant records and returns.

Conclusion: The credit was held admissible notwithstanding the absence of registration, and the issue was decided in favour of the assessee.

Final Conclusion: The denial of CENVAT credit was unsustainable, and the assessee was held entitled to the credit with consequential relief.

Ratio Decidendi: CENVAT credit cannot be denied for procedural defects in documentation or registration where the receipt and distribution of eligible input-service credit are otherwise established and no excess or duplicate availment is proved.

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