2012 (8) TMI 71 - AT - Service Tax

Waiver of pre-deposit duty denial of benefit of Cenvat Credit on Service Tax paid on the various services utilized by assessee on the ground that the invoices do not reflect the correct name and address of the appellant Held that - appellant cannot take shelter under the provisions of the said Rule 9(2) in as much as in terms of Rule 4(a), the basic and primary requirement is that the documents on the basis of which credit is being availed should be in the name of service receiver. Other of units assessee were working from the same premises, is required to be taken into consideration and the fact that appellants have admitted that credit of Rs.9,30,920/- so availed by them was in respect of common services utilized by all the units located in the same premises is indicative of the fact that wrong credit was being availed. appellants are directed to further deposit of Rs.10 lakhs balance amount of duty and entire amount of penalty imposed upon them shall stands waived

Summary

Issues:
Prayer to dispense with pre-deposit of duty, denial of Cenvat Credit on Service Tax, incorrect name and address in invoices, multiple units availing services, Rule 9(2) of Cenvat Credit Rules, 2004, eligibility of Modvatable documents, prima facie case for stay petition, deposit of duty amount, waiver of penalty, compliance timeline.

Analysis:

The judgment revolves around the application seeking dispensation of pre-deposit of duty amounting to Rs.64,85,023, which was confirmed against the appellant due to the denial of Cenvat Credit on Service Tax. The issue stemmed from the contention that the invoices did not accurately reflect the appellant's name and address, despite the authorities below extending the credit based on the correct information present in the invoices. The appellant's other units at the same address were also utilizing services, leading to confusion regarding the invoices and the availed credit.

The appellant's counsel referred to Rule 9(2) of the Cenvat Credit Rules, 2004, arguing that credit cannot be denied based on incomplete document particulars if essential details like payment of duty or service tax, goods or services description, and provider's name and address are present. However, the Revenue contended that Rule 4(a) mandates documents for availing credit to be in the name of the service receiver, emphasizing that incorrect recipient details could make the document eligible for other units to claim credit. The disagreement highlighted the need for the appellant to deposit the disputed duty amount.

The tribunal, after considering both sides, found that the appellant failed to establish a strong prima facie case in their favor for unconditional stay. Acknowledging that multiple units were operating from the same premises and that the appellant had mistakenly availed credit for common services used by all units, the tribunal directed the appellant to deposit an additional Rs.10 lakhs within two weeks, in addition to the previously deposited amount of approximately Rs.9.30 lakhs. This deposit condition was imposed to ensure compliance, with the waiver of the balance duty amount and the entirety of the imposed penalty during the appeal's pendency.

In conclusion, the judgment underscores the importance of accurate documentation for availing Cenvat Credit, especially when multiple units share services. The tribunal's decision to require a deposit from the appellant reflects the need to prevent wrongful credit utilization and maintain compliance with relevant rules and regulations.