2013 (12) TMI 1474 - AT - Service Tax

Denial of CENVAT Credit - input service had no nexus with the manufacture of goods and the document was incomplete - Held that - what exactly was suppressed by the assessee in this case is not known. The requirement of submission of the documents on the basis of which credit has been taken is no longer in the Statute book. Therefore, the appellant was not required to produce the documents on the basis of which credit has been taken. Hon ble Supreme Court has already taken a view to the effect that to invoke suppression facts, suppression of facts should be such that they should be ones which are required to be declared in accordance with Statute before the Statutory Authorities. When a document on the basis of which credit was taken is not required to be produced, how suppression of facts can be invoked and on what basis defies imagination. In any case, I find considerable force in the arguments advanced by the learned counsel that before a decision in the case of Cadila Healthcare (2013 (1) TMI 304 - GUJARAT HIGH COURT ) by Hon ble Gujarat High Court was rendered, there was a view prevailing that credit is admissible in respect of service rendered by commission agent. In fact, there is a Circular issued by the Board where such a view has been taken. Under these circumstances, extended period could not have been invoked in this case. - impugned order is set aside - No deficiency in the bill/invoice, I have to take a view that Cenvat credit has been taken correctly. - Decided in favour of assessee.

Summary

Issues Involved:
1. Admissibility of Cenvat credit based on a bill raised by a commission agent.
2. Nexus between the input service and manufacture of goods.
3. Deficiency in the documents for availing Cenvat credit.
4. Application of the limitation period for the credit.

Issue 1: Admissibility of Cenvat credit based on a bill raised by a commission agent:
The appellant availed Cenvat credit based on a bill from a commission agent, which was challenged by the Revenue for lacking nexus with manufacturing and being incomplete. The appellant argued that the Commission Agent was engaged in sales promotion activities, citing relevant case laws. The Tribunal found the contract terms between the parties distinguishable from previous cases and held in favor of the appellant, stating that if a commission agent undertakes sales promotion activities, the credit is admissible.

Issue 2: Nexus between the input service and manufacture of goods:
The Tribunal analyzed the nature of services provided by the Commission Agent in relation to sales promotion activities. The learned counsel presented arguments based on decisions of different High Courts and the Tribunal, highlighting the importance of sales promotion in determining the admissibility of Cenvat credit. The Tribunal concluded that the appellant had established a case for the credit based on the specific terms of the contract and the nature of services provided by the Commission Agent.

Issue 3: Deficiency in the documents for availing Cenvat credit:
The Tribunal scrutinized the documents submitted for availing Cenvat credit and compared them with the requirements under Rule 9(2) of the Cenvat Credit Rules. It was observed that the original authority had not properly verified the documents and had raised objections without sufficient basis. The Tribunal found that the invoice submitted by the appellant contained all necessary details, contradicting the observations made by the authorities. The Tribunal criticized the lack of proper verification and reasoning in disallowing the credit based on document deficiencies.

Issue 4: Application of the limitation period for the credit:
The appellant raised the issue of limitation regarding the credit availed. The Tribunal, after considering the merits of the case and the document submitted, found in favor of the appellant on the admissibility of the credit. Despite this finding, the Tribunal deemed it appropriate to address the limitation issue separately, ensuring a comprehensive resolution of all aspects of the case. The Tribunal ultimately set aside the impugned order, allowing the appeal and granting relief to the appellant based on the merits and limitations of the case.