GAR-7 Challan in Head Office’s Name not a valid Reason to Deny Credit: CESTAT [Read Order]
Considering the GAR-7 challan was in the head office’s name, CESTAT ruled procedural issues can't deny valid Cenvat credit
![GAR-7 Challan in Head Office’s Name not a valid Reason to Deny Credit: CESTAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/02/CESTAT-CESTAT-Ahmedabad-GAR-7-Challan-Taxscan.jpg "GAR-7 Challan in Head Office’s Name not a valid Reason to Deny Credit: CESTAT [Read Order]")
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Cenvat credit cannot be denied solely on the ground that the GAR-7 challan was in the name of the head office or another unit of the same company. SKF Technologies Pvt. Ltd., the appellant, is engaged in manufacturing and had availed CENVAT credit amounting to Rs. 1,01,671 invoices...
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Cenvat credit cannot be denied solely on the ground that the GAR-7 challan was in the name of the head office or another unit of the same company.
SKF Technologies Pvt. Ltd., the appellant, is engaged in manufacturing and had availed CENVAT credit amounting to Rs. 1,01,671 invoices with different addresses. The department alleged that the credit availed by the appellant lacked nexus with output services and was based on ineligible documents, including photocopies of invoices and invoices issued to a different unit.
The department found that certain GAR-7 challans used for availing credit were issued to the Bangalore unit, rather than the Ahmedabad unit. The department also found that the appellant failed to produce invoices during the audit period and had, in some cases, claimed credit on VAT payments instead of service tax.
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The appellant argued that proportionate credit was claimed at the Ahmedabad unit and relied on Greaves Cotton (2015 (37) STR 395) and M/S Piramal Glass Pvt. Ltd. (2021 (55) GSTL 22 (Tri-Ahm)), which allowed credit of one unit to be availed by another unit of the same company. The appellant also contended that minor errors in foreign service providers' invoices, such as the inclusion of VAT, should not be grounds for denial of credit.
The department countered that the appellant had failed to provide invoices during the audit and adjudication process and that the credit was taken on documents, not in the appellant’s name.
The two-member bench comprising Ramesh Nair (Judicial Member) and C.L. Mahar (Technical Member) observed that no allegation had been raised regarding the eligibility of input services themselves. The tribunal ruled that merely because the GAR-7 challan was in the name of the Bangalore unit, credit could not be denied if the head office was part of the same entity.
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The tribunal upheld the appellant’s right to claim Cenvat credit for common services used across units, provided the credit was validly availed. The appeal was allowed.
To Read the full text of the Order CLICK HERE
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