2014 (9) TMI 1034 - AT - Service Tax

Cenvat Credit - duty paying documents - address mentioned on the Invoice was of different premises of the assessee - Held that - as there was no lapse in payment of duty or tax and filing Service Tax return by the appellant the other premises/units also belong to the appellant from where the output services are rendered. The input services to which the invoices in dispute relate are utilized in rendering output taxable service. The appellant have made payment of input service alongwith the Service Tax charged by the service provider. The appellant have maintained proper records in normal course of business and have disclosed the credit taken regularly in periodical returns. Thus I hold that the appellant is entitled to avail CENVAT credit disputed by Revenue. - Decided in favor of assessee.

Summary

Issues:
- Entitlement to avail CENVAT credit on bills with different address
- Time limitation for demand raised by the department
- Denial of CENVAT credit due to procedural lapses
- Imposition of penalty without "mens rea"

Analysis:

Issue 1: Entitlement to avail CENVAT credit on bills with different address
The appellant, engaged in providing "Clearing and Forwarding" services, availed CENVAT credit of Service Tax on input services based on bills with addresses not matching their registered premises. The department demanded repayment, alleging contravention of CENVAT Credit Rules. The appellant argued that the department's demand was time-barred and that the substantive provisions were met despite the procedural lapse. The Tribunal held that as the appellant paid the duty and tax, maintained proper records, and utilized the input services for taxable output services, they were entitled to the CENVAT credit. The Tribunal also deemed the show-cause notice time-barred.

Issue 2: Time limitation for demand raised by the department
The appellant contended that the demand was time-barred as there was no intention to evade tax, and the department was aware of the discrepancy in 2009 but issued the notice in 2010. The Tribunal agreed, stating that the extended period of limitation was not applicable due to the absence of fraud or suppression by the appellant.

Issue 3: Denial of CENVAT credit due to procedural lapses
The appellant argued that the denial of CENVAT credit based on a procedural lapse regarding the address on invoices was unjust, citing Circular No. 441/7/99-CX. The Tribunal held that the technical lapse should not deny the appellant the right to CENVAT credit, emphasizing compliance with substantive provisions over procedural requirements.

Issue 4: Imposition of penalty without "mens rea"
The appellant challenged the penalty imposed, asserting the absence of "mens rea" to wrongly avail CENVAT credit. The Tribunal agreed, stating that penalty imposition required the existence of intention to evade tax, which was not present in this case.

In conclusion, the Tribunal allowed the appeal, set aside the impugned order, and granted the appellant consequential relief, emphasizing the entitlement to CENVAT credit despite procedural lapses and the absence of fraudulent intent.