Whether Cenvat credit can be availed when invoice is in the name of head office or in the name of other unit?

PJ/CASE LAW/2014-15/2508

Case:-M/s INOX AIR PRODUCTS LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIGAD

Citation:-2015-TIOL-08-CESTAT-MUM

Brief facts:-The appellants is in appeal against the impugned order in appeal which confirmed the demand of Service Tax of Rs. 3,86,656/- under Rule 14 of Cenvat Credit Rules read with Section 11A of the Central Excise Act, appropriate interest under Section 11AB and equivalent penalty under Section 11AC of the Act.
The appellant is engaged in the manufacture of natural gases. They have a unit in various places including units at Patalganga. The demand of duty was raised for the reason that the invoices under which the credit was availed were either in the name of their head office or in the name of their other unit at Thane. The demand was confirmed on the ground that the appellant should have been registered for ISD registration to enable distribution of credit to their respective units. Department held that mere payment is not enough to claim the credit but material evidence should be brought on record that the said services are utilized in the Patalganga unit for claiming credit in such manner. The extended time period under Section 11A was invoked.

Appellant’s contention:-Ld. Counsel showed as a sample, one invoice issued by the CHA agent in the name of their Head Office in respect of clearing charges for goods imported for their Patalganga Unit. For this invoice, he showed co-relation between the invoice and the Bill of Entry which was in the name of their Patalganga Unit, to prove that the service was indeed received at Patalganga Unit. Further, he stated that in the case of machine repairs, the work is centralized in the Thane Unit for all the units and, therefore, all such invoices are addressed to the Thane Unit. On being asked whether all the services were received in their unit he answered that the question of actual receipt of the services had not arisen either in the show cause notice or at the stage of adjudication order or in the appeal. He cited the judgments of this tribunal in the case of Modern Petrofils Vs. Commissioner of C.Ex, Vadodara 2010 (20) S.T.R. 627 (Tri-Ahmd.) = 2010-TIOL-1204-CESTATAHM. Doshion Ltd. Vs. Commissioner of Central Excise, Ahmedabad 2013 (288) E.L.T. 291 (Tri- Ahmd) = 2013-TIOL-395-CESTAT-AHM And Demosha Chemicals Pvt. Ltd. vs. Commissioner of C. Ex & S.T. Daman 2014 (34) S.T.R. 758 (Tri-Ahmd.) = 2014-TIOL-534-CESTAT-AHM. Availment of services at places different from the address mentioned in the invoices is only a procedural formality. And also that even if the appellant should have taken ISD registration, the same would not disentitle them from availing credit in different units before 2012 when a change was brought in Rule 7 of the Cenvat Credit Rules to the effect that the Cenvat Credit should be distributed properly amongst all the units.

Respondent’s contention:-The Ld. A.R. reiterated the findings of the authority. He further stated that it has not been verified whether the services had actually been received in the Patalganga Unit.

Reasoning of judgment:-The Hon’ble Tribunal have carefully considered the rival contentions. The appellant in this case have nine units where the same product is manufactured. Therefore, the doubt of nexus of input and output products will not arise. Ld. Counsel has also shown a particular invoice issued by a CHA in the name of the Head Office. It is quite natural that the service provided by a CHA would be in the name of the Head Office where clearance of goods through Customs will be centralized. They agree that a doubt has never been raised regarding the actual receipt of the services. The only basis for denying credit has been that invoices are either in the name of another unit of the appellant or in the name of their Head Office. The judgments cited above touch upon the issue at hand in support of the case of the appellant. There being no allegation of the service have not been received, the credit stands to be allowed.
In view of the above, the appeal is allowed.

Decision:-Appeal allowed.

Comment:-The analogy of the case is that here only basis for denying credit has been that invoices are either in the name of another unit of the appellant or in the name of their Head Office. This is quite natural that the service provided by CHA would be in the name of the HO where clearance of goods through Customs will be centralized. Hence actual receipt of service does not matter for credit. Therefore, appellant can avail the Cenvat credit of service received by CHA.

Prepared by:- Monika Tak

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PJ/CASE LAW/2014-15/2508

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