2014 (1) TMI 269 - AT - Central Excise

Denial of Cenvat credit on Input services Debit notes raised by service provider not in prescribed format as per Rule 9(1) of Cenvat credit rules Waiver of Pre-deposit Held that -Following CCE Vs Grasim Industries Ltd 2011 (7) TMI 944 - CESTAT, NEW DELHI - debit notes can be considered to be eligible modvatable documents after examining the debit notes which give the essential particulars - Even if some of the debit notes are not mentioning the address of service recipient, the case can be covered by Rule 9(2) - the ground was not the basis for issuance of show cause notice and was not taken by the Commissioner in the order - A new case cannot be made by Revenue at the Appellate Stage as per the settled law Prima facie appellants have established a case in their favour Pre-deposits waived till the disposal - stay granted.

Summary

Issues:
Prayer for dispensing with pre-deposit of confirmed amount due to denial of Cenvat credit based on debit notes as admissible documents.

Analysis:
The appellant sought to dispense with the condition of pre-deposit of Rs.24,42,163/- confirmed against them due to the denial of Cenvat credit on the basis of debit notes raised by the service provider. The Revenue contended that debit notes cannot be considered admissible documents for availing Cenvat credit as per Rule 9(1) of Cenvat Credit Rules. The Commissioner upheld the demand, partly denying credit for tour operator service and repair services. The appellant argued that all necessary details were present in the debit notes, emphasizing Rule 9(1) which allows credit if documents contain requisite particulars. They also cited Rule 9(2) to support that credit should not be disallowed in the absence of any dispute regarding input service receipt.

The appellant's advocate highlighted that the adjudicating authority did not dispute the receipt of input services by the appellant. The appellant's position was that the debit notes contained essential details such as the input service provider's registration number, appellant's name, and service type, meeting the requirements under Rule 9(1). Conversely, the Joint CDR argued that some documents lacked the appellant's proper address and service classification, asserting that the debit notes were ineligible for credit. The Tribunal reviewed precedent cases, including one involving Grasim Industries Ltd, which recognized debit notes as eligible modvatable documents. Even if some debit notes lacked the recipient's address, the Tribunal deemed Rule 9(2) applicable. Notably, the Revenue's new argument regarding incomplete debit notes was deemed impermissible at the appellate stage, as it was not part of the original show cause notice or the Commissioner's order.

In light of the submissions and precedents, the Tribunal found the appellant's case strong and ruled in their favor to unconditionally allow the stay petition, considering the appellant's entitlement to Cenvat credit based on the debit notes provided. The Tribunal's decision emphasized the importance of adherence to established legal principles and the inadmissibility of introducing new arguments at the appellate stage beyond the scope of the original proceedings.