2015 (7) TMI 1134 - AT - Service Tax

Cenvat credit - service tax taken by the appellant on the services indicated in the invoices were received prior to 10.09.2004, when the Cenvat Credit Rules, 2004 was not in vogue - Held that - the Cenvat Credit Rules, 2004 were framed vide Notification No. 23/04-CE(NT), dated 10.09.2004. In Rule 3 of the said Rules, the embargo has been created, which is to the effect that input service received by the manufacturer of the final product on or after such effective date i.e. 10.09.2004, will be eligible for taking the cenvat credit. Since the disputed invoices were issued on 28.09.2004, 29.09.2004 and 20.12.2004, the Department took the view that the services in relating to those invoices were provided prior to such effective date, and accordingly denied the cenvat benefit to the appellant. In arriving at such conclusion, the Department has not produced any evidence to show that the work/ service, in question, were completed prior to 10.09.2004. However, I find from the certificate produced by the appellant that the service provider M/s Mcnally Bharat Engineering Co. Ltd. vide their certificate dated 11.09.2007 has categorically stated that work/service relating to the disputed invoices were completed after 10.09.2004. Though the said certificate was produced by the appellant before the authorities below, but no findings have been recorded in dis-proving the same and since no material evidence has been brought on record by the Department to prove that the works/ service has been completed before 10.09.2004 and the genuineness of the certificate having not been disputed either by the Adjudicating Authority or by the Appellate Authority, the cenvat benefit cannot be denied to the appellant. - Decided in favour of appellant

Summary

Issues:
- Denial of cenvat credit of service tax due to services received prior to the effective date of Cenvat Credit Rules, 2004.

Analysis:
The appeal was filed against the order denying cenvat credit of service tax by the Commissioner Central Excise (Appeals) on the grounds that services indicated in the invoices were received before 10.09.2004 when the Cenvat Credit Rules, 2004 were not in effect. The appellant argued that the disputed invoices issued by the service provider were for services rendered after the enactment of the Cenvat Credit Rules, 2004. The appellant presented a certificate from the service provider, certifying that the services were completed after 10.09.2004. The appellant contended that the burden of proof lies with the Department to show that the services were provided before the effective date, which was not satisfactorily discharged by the Department.

The Cenvat Credit Rules, 2004 were enacted on 10.09.2004, and Rule 3 of the Rules specified that input services received after this date would be eligible for cenvat credit. The Department denied the cenvat benefit to the appellant for services related to invoices issued after the effective date, citing that the services were provided before 10.09.2004. However, the Department failed to provide evidence demonstrating that the services were completed before the effective date. The appellant produced a certificate from the service provider stating that the work was completed after 10.09.2004. The Tribunal noted that the Department did not dispute the genuineness of the certificate, and no findings were made to disprove it. As a result, since there was no material evidence to prove completion before 10.09.2004, the cenvat benefit could not be denied to the appellant. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant with any consequential relief as per law.