2012 (4) TMI 130 - AT - Service Tax

Demand - Cenvat credit on the strength of debit notes - assessee has submitted the detailed worksheet of debit notes (summary) for the relevant period along with challans evidencing payment of service tax by their two parties in question viz., M/s. Kunal Enterprises and M/s. Neha Global and the assessee has also submitted the service tax returns in the form of ST3 duly acknowledged by the C.Ex. department - Rule 4A of the Service Tax Rules, 1994 and the title of the duty paying documents, i.e. debit note instead of invoice, bill or challan does not make a difference more so when the service tax has been charged and paid into the Govt, exchequers account - Decided in favor of the assessee

Summary

Issues:
1. Availment of Cenvat credit based on debit notes.
2. Interpretation of Rule 9(1) regarding documents for availing Cenvat credit.
3. Reliance on previous Tribunal decision in a similar case.

Analysis:

Issue 1: Availment of Cenvat credit based on debit notes
The respondent had availed Cenvat credit based on debit notes, which led to the initiation of proceedings by the Revenue. The impugned order extended the benefit to the respondent after considering the submissions made by the assessee. The Tribunal observed that Rule 9(1) prescribed documents for availing Cenvat credit paid by a service provider, which could include an 'invoice', a 'bill', or a 'challan'. The Tribunal found that the debit notes issued by the service providers satisfied the requirements of Rule 4A of the Service Tax Rules, 1994, despite being titled as 'debit notes' instead of 'invoice, bill, or challan'. The essential details required for a valid duty payable document were present in the debit notes, including service tax payable, description of taxable service, assessable value, service tax registration number, and provider's details.

Issue 2: Interpretation of Rule 9(1) regarding documents for availing Cenvat credit
The Tribunal analyzed the provisions of Rule 9(1) in detail, noting the specific requirements for documents to avail Cenvat credit. It emphasized that while excise duty payment required specific documents like an 'invoice', service tax payments could be supported by an 'invoice', a 'bill', or a 'challan'. The Tribunal examined the submissions, worksheets of debit notes, and challans evidencing service tax payment by the service providers. It also considered certificates issued by the service providers confirming the issuance of invoices/bills under the title 'debit notes'. The Tribunal concluded that all essential requirements of a valid duty payable document were met through the debit notes, and the service tax payments were duly reflected in the ST3 returns acknowledged by the jurisdictional Central Excise authorities.

Issue 3: Reliance on previous Tribunal decision in a similar case
The appellant argued that the Commissioner had relied on a previous Tribunal decision involving Pharmalab Process Equipment (P.) Ltd., where the matter was remanded, and hence, should not have been considered. However, the Tribunal clarified that the decision in the Pharmalab case did not preclude availing Cenvat credit based on debit notes. The Tribunal noted that the Commissioner had correctly examined the details and reached a valid conclusion in line with the observations of the Tribunal in the Pharmalab case. Consequently, the Tribunal found no merit in the appeal and rejected it based on the thorough analysis presented in the impugned order.

This detailed analysis of the judgment highlights the interpretation of relevant legal provisions, the application of precedents, and the reasoning behind the Tribunal's decision regarding the availment of Cenvat credit based on debit notes.