2015 (8) TMI 1323 - AT - Central Excise

Recovery of Cenvat credit alongwith interest and penalty - service tax paid on manpower recruitment service on 21.05.2009 - which was not charged by the service provider in its invoice issued initially but was claimed through supplementary invoice issued subsequently - supplementary invoices are not eligible document for taking cenvat credit as prescribed under Rule 9 of the Cenvat Credit Rules 2004. Held that - the issue regarding eligibility for taking of cenvat credit on the basis of supplementary invoice issued by the service provider on 15.05.2009 is covered by the decision of this Tribunal in the case of Delphi Automotive System Pvt. Ltd. Vs. CCE Noida 2013 (12) TMI 156 - CESTAT NEW DELHI . Cenvat credit - denied by Id. Commissioner (Appeals) - Contravention of provisions of Rule 4(7) of the Cenvat Credit Rules by taking credit before making payment to the service provider - Held that - I find from the available records that though the said amount was taken by the appellant the same was regularised upon deposit of the interest attributable to such irregular availment of credit. Since the appellant has compensated the government by paying interest on account of early availment of cenvat credit before making payment of service tax to the service provider the matter got regularised and there is no reason for denial of such credit to the appellant. - Decided in favour of appellant

Summary

Issues:
1. Eligibility for availing cenvat credit based on supplementary invoices.
2. Contravention of Rule 4(7) of the Cenvat Credit Rules.

Analysis:
1. Eligibility for availing cenvat credit based on supplementary invoices:
The case involved the appellant, a manufacturer of aerated water/mineral water, who availed cenvat credit on service tax paid for manpower recruitment services through a supplementary invoice issued by the service provider. The Service Tax Department objected, citing that supplementary invoices were not eligible documents for claiming cenvat credit under Rule 9 of the Cenvat Credit Rules, 2004. The Commissioner (Appeals) upheld the disallowance of cenvat credit. However, the appellant argued that there was no prohibition in the rules against availing credit based on supplementary invoices. The Tribunal referred to a previous decision involving Delphi Automotive System Pvt. Ltd., where it was established that supplementary invoices could be considered valid documents for claiming cenvat credit. As a result, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

2. Contravention of Rule 4(7) of the Cenvat Credit Rules:
The Commissioner (Appeals) also noted a contravention of Rule 4(7) of the Cenvat Credit Rules, as the appellant had taken credit before making payment to the service provider. However, the Tribunal found that the appellant had regularized this issue by depositing interest related to the early availment of credit. Since the appellant had compensated the government by paying the interest, the Tribunal concluded that there was no justification for denying the cenvat credit. Consequently, the Tribunal set aside the impugned order, ruling in favor of the appellant.