2011 (11) TMI 423 - AT - Service Tax

Cenvat credit - Invoices prior to 10.9.2004 - receipt of services at registered premises - Invoices without bearing date - receipt and installation of inputs and capital goods outside the premises - held that - Matter related to verification of date on the Invoice remanded back. Regarding invoices prior to 10.9.2004 - held that - The Commissioner s finding that during the period prior to 10-9-2004, in terms of Service Tax Credit Rules, 2002, the Cenvat credit was available only in respect of those input services which were of the same category as that of output service is factually incorrect as these rules had been amended w.e.f. 14-5-2003 by Notification No. 5/2003-S.T. so as to permit Cenvat credit even in respect of those input services which were not falling in the same category as that of output service. - Credit allowed for invoices issued on or after 14-5-2003..

Summary

Issues:
1. Denial of Cenvat credit based on pre-10-9-2004 invoices and invoices without dates.
2. Interpretation of Rule 3(1) and Rule 11(1) of Cenvat Credit Rules, 2004.
3. Applicability of Service Tax Credit Rules, 2002 and its amendment by Notification No. 5/2003-S.T.

Analysis:
1. The appeal involved the denial of Cenvat credit to the appellants for allegedly wrongly taken credits based on invoices issued before 10-9-2004 and invoices without dates. The Commissioner's order confirmed the demand for certain credits and imposed a penalty. The appellant challenged this decision.

2. The main contention revolved around the interpretation of Rule 3(1) and Rule 11(1) of the Cenvat Credit Rules, 2004. The appellant argued that Rule 11(1) allows for the utilization of unutilized credits earned under the previous rules, even if the invoices were issued before 10-9-2004. The Commissioner's interpretation was challenged as not considering this transitional provision.

3. The debate also touched upon the applicability of the Service Tax Credit Rules, 2002, and its subsequent amendment by Notification No. 5/2003-S.T. The appellant argued that the rules were amended to allow for credit even if the input and output services were not in the same category, which the Commissioner failed to consider. This led to the conclusion that the impugned order was not sustainable.

4. The Tribunal, after hearing both sides, found merit in the appellant's arguments. It was noted that the Commissioner did not consider the amendment to the Service Tax Credit Rules, 2002, which impacted the availability of Cenvat credit. As a result, the impugned order was set aside, and the matter was remanded to the Commissioner for fresh adjudication in line with the Tribunal's directions and observations.

5. The judgment highlighted the importance of considering transitional provisions and amendments to the relevant rules while determining the eligibility for Cenvat credit. The case underscored the need for a thorough analysis of legal provisions to ensure a fair and accurate decision in matters of tax credits and compliance with the law.