2014 (34) S.T.R. 758 (Tri.-Ahmd.) M/s. Demosha Chemicals Pvt. Ltd. vs. Commissioner of C. Ex. & St. Daman

Facts:
During the period from September, 2006 to July, 2011, the appellants availed CENVAT Credit of input services, invoices of which were raised at the registered/head office. The head office, not being registered as Input Service Distributor, did not raise any invoice on the appellants to distribute CENVAT Credit. Accordingly, CENVAT Credit availed by the appellants was disallowed in absence of valid document for availment of CENVAT credit vide Rule 9(1) of the CENVAT Credit Rules, 2004. The department contended that in absence of registration as Input Service Distributor, the appellants were not allowed to distribute CENVAT Credit only to one unit.

Held:
It was not disputed that the appellants had more than one unit, the invoices received by head office related to actual provision of services and that the appellants had availed more than eligible CENVAT Credit of service tax paid. In a similar case of Doshion Limited vs. Commissioner of Central Excise, Ahmedabad 2013 (288) ELT 291 (Tri- Ahmd.), it was held that there was no requirement for proportionate distribution of CENVAT Credit. Further, there was no loss to Revenue. Also, in absence of any legal requirement, the procedural irregularity had to be ignored. Further in case of Modern Petrofils vs. Commissioner of Central Excise 2010 (20) STR 627 (Tri. Ahmd.), the invoices were raised in the name of head office as against factory and the appellants were not registered as Input Service Distributor. The Tribunal held that since admissibility of input services was not disputed, the omissions were curable defects and CENVAT Credit was allowed. Since there were no provisions for distribution of proportionate CENVAT Credit as Input Service Distributor to various units before 1st April, 2012 and in view of ratio of decisions cited above, the appeal was allowed.