2009 (11) TMI 879 - AT - Service Tax

Summary

Issues:
1. Admissibility of service tax credit for a manufacturing unit.
2. Compliance with invoice details for input service distributor.
3. Rectifiability of defects in invoices for service tax credit.
4. Authority to verify and confirm rectification of defects.

Admissibility of Service Tax Credit:
The appellant, having six manufacturing units, obtained registration as an input service distributor for their head office and distributed service tax credit to the units. However, a service tax credit of Rs. 7,67,66,000 for a unit was deemed inadmissible due to missing details on the invoices issued by the distributor. The penalty and interest were also imposed. The advocate argued that despite initial deficiencies in providing required details as per Rule 4A, all necessary information was later furnished. He cited precedents to support the rectifiability of procedural defects in invoices.

Compliance with Invoice Details:
The JDR contended that essential details required in the invoices were not provided by the appellant, leading to the denial of credit. The Commissioner had made a clear finding in this regard. However, the appellant's advocate emphasized the rectifiability of the defects and the verification process carried out by the department to support their case.

Rectifiability of Defects in Invoices:
The Tribunal acknowledged the challenges faced by the appellant in the initial stage of distributing input service tax credit, considering the voluminous documents involved. Relying on the precedent involving Philips Electronics, the Tribunal held that the defects in the invoices were procedural and rectifiable. The focus was on whether the appellant had rectified the deficiencies as required by law and whether any irregular credit had been availed.

Authority to Verify and Confirm Rectification:
Given the straightforward nature of the issue, the Tribunal allowed the stay petition, setting aside the impugned order. The matter was remanded to the original adjudicating authority to verify if all defects in the invoices had been rectified by the appellant and to confirm the admissibility of the credit taken. The appellants were granted the opportunity to present their case before a final decision was made.