Distribution of CENVAT credit by ISD not mandatory

The Tribunal has held that non-distribution of CENVAT credit by Input Service Distributor is condonable as procedural lapse since rule 7 of CCR, 2004 merely gave an option to the assessee to distribute input service credit as evidenced by the word “may distribute”.

It is important to note that section 20 of the CGST Act, 2017 uses the phrase ‘shall distribute’.

M/s MAINI PRECISION PRODUCTS LTD

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