Admissibility of cenvat credit on invoice in name of head office

PJ/Case Laws/2011-12/1505

Case: Parekh Plast (India) Pvt. Ltd. v/s Commissioner of Central Excise, Vapi

Citation: 2012 (25) S.T.R. 46 (Tri. - Ahmd.)

Issue:- Whether credit of input service deniable only on ground that invoice is in name of Head Office and Head Office is not registered as Input Service Distributor, when there is no dispute about availment services and their utilization for payment of service tax on output services?

Brief Facts:- Appellant is engaged in manufacture of excisable goods viz, fabricated display items of fibre glass, acrylics ABS, Signage fabricated items with or without light etc. The dispute in the present appeal relates to availment of CENVAT Credit of Service Tax paid on the input services totally amounting to Rs. 5,43,200/- (Rupees Five Laldis, Forty Three Thousands, Two Hundreds only). The Show Cause Notice dt. 17-8-09 was issued to the appellant, alleging that during the period August 2004 to November 2006, the appellant had availed the said credit on the strength of invoices issued by the service provider, which were in the name of their head office. Inasmuch as the head office was not registered as input service distributor, availment of credit on the basis of such endorsement of head office, was not justified.

The said Show Cause Notice culminated into an order passed by original adjudicating authority, vide which he confirmed the demand as also imposed penalty of identical amount upon the appellant. The said order was upheld by Commissioner (Appeals). Hence, the present appeal.

Appellants Contention:- It is submitted that in the absence of any dispute about availment of services and their utilization for payment of Service Tax on the output service, denial of credit on the sole ground that the invoices were in the name of head office, was not justified. They placed reliance upon the Tribunal's order in the case of Modern Pet rofils v. CCE, Vadodara - 2010 (20) S.T.R 627 (Tri.-Ahmd.), laying down that denial of credit on the sole ground that the invoices were in the name of head office, was .not justified, inasmuch as the same is a procedural defect, which can be cured.

Reasoning of Judgment:- The Tribunal held that the Show Cause Notice was issued to the appellant on the sole allegation that the invoices are in the name of head office, who was not registered as ISD and as such availment of credit on the basis of the same, was not justified. There is no allegation in the said Show Cause Notice that the input services do not stand utilized by the appellant for providing dutiable output services. The appellants, in their submissions before the adjudicating authority, have very clearly held that their manufactured final product is also dutiable as also the input services of erection and installation are covered by these services. The credit of input services is being utilized by them for payment of Service Tax on the output services. The Tribunal's decision relied upon by the Id. Advocate are clearly to the effect that the invoices, even in the name of head office, are eligible documents for the purpose of credit. The said defects are omissions, which are totally curable defects and are condonable.

Decision:- Appeal Allowed.

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PJ/Case Laws/2011-12/1505

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