Cenvat credit not denied for procedural vulnerabilities in invoices or delayed Input Service Distributor registration when entitlement is otherwise proved.
Cenvat credit cannot be denied merely because the supporting documents were photocopies or a Head Office statement instead of original invoices, where the relevant invoice particulars were available and no false or wrongful availment was shown. The requirement of original documentation was treated as procedural, and the underlying entitlement to credit was upheld. Likewise, failure to obtain Input Service Distributor registration before distributing credit did not by itself disentitle the assessee from credit, since the Head Office maintained records, distributed only available credit, and the department did not prove excess or impermissible distribution. The Tribunal's order allowing the credit was therefore left undisturbed.
Issues: (i) Whether Cenvat credit could be denied on the ground that it was taken on the basis of photocopies or a statement issued by the Head Office instead of original invoices. (ii) Whether non-obtaining of Input Service Distributor registration before distribution of credit disentitled the assessee from taking Cenvat credit.
Issue (i): Whether Cenvat credit could be denied on the ground that it was taken on the basis of photocopies or a statement issued by the Head Office instead of original invoices.
Analysis: The credit was found to have been distributed by the Head Office on the basis of a statement containing the relevant particulars of the invoices and services. The objection based on photocopies was not supported by any specific allegation that credit had been wrongly taken elsewhere or that the documents were inherently false. The requirement as to the form of document was treated as procedural, and the Court accepted the Tribunal's view that a substantive credit could not be denied merely for such procedural deficiency when the underlying entitlement was otherwise established.
Conclusion: The credit could not be denied on this ground, and the finding was in favour of the assessee.
Issue (ii): Whether non-obtaining of Input Service Distributor registration before distribution of credit disentitled the assessee from taking Cenvat credit.
Analysis: The Court accepted the Tribunal's view that the absence of prior Input Service Distributor registration was a procedural lapse and not a substantive bar to availing credit, particularly when the Head Office maintained the records, distributed only the available credit, and the department did not establish any excess or impermissible distribution. In these circumstances, registration was treated as a compliance requirement that did not defeat the credit otherwise earned and distributed.
Conclusion: Non-registration as an Input Service Distributor did not disentitle the assessee from Cenvat credit, and the issue was decided in favour of the assessee.
Final Conclusion: The Revenue failed to demonstrate any substantial question of law warranting interference, so the Tribunal's order allowing the credit was left undisturbed.
Ratio Decidendi: Cenvat credit cannot be denied solely for procedural defects in documentation or for delayed Input Service Distributor registration when the entitlement to credit and its distribution are otherwise established and no contrary misuse is shown.
TaxTMI 
AI Drafter ✕
TaxTMI 
