2009 (8) TMI 720 - AT - Service Tax

Waiver of pre-deposit - Cenvat credit paid on the service tax documents for availing cenvat credit - credit has been availed on the bills, on which all necessary information as per requirement of the law was available - bills were genuine - reason for denial of credit is on the ground that supplier has defaulted in discharging the service tax liability Held that - this cannot be a reason for denying the Service Tax credit - as they have already paid the amount of invoice to the supplier - waiver of the pre-deposit - allowed

Summary

Issues: Denial of Cenvat Credit based on improper invoices.

The judgment by the Appellate Tribunal CESTAT, Bangalore, involved a stay petition against the waiver of pre-deposit and penalty. The issue revolved around the denial of Cenvat Credit to the applicant due to improper invoices lacking necessary details as required by the law. The Commissioner (Appeals) had previously acknowledged that the credit was availed on bills containing all the essential information. Upon reviewing the Order-in-Appeal, it was noted that the Commissioner had concluded that the necessary information was indeed present on the bills. Additionally, verification at the supplier's end confirmed the genuineness of the bills and their proper accounting. The denial of credit was solely based on the supplier's failure to discharge service tax liability, which, according to the Tribunal, should not be a reason to withhold Service Tax credit from the applicant, especially since the applicant had already paid the invoice amount to the supplier. The Tribunal found that the applicant had established a prima facie case for the waiver of the pre-deposit amounts, and consequently, the application for waiver was granted, and recovery was stayed pending the appeal's disposal. The judgment was pronounced and dictated in open court by Member (J) M.V. Ravindran.