2014 (2) TMI 382 - AT - Service Tax

Denial of Cenvat credit Credit on Business Auxiliary Service Non-mention of registration number in the invoices Waiver of Pre-deposit Held that - It cannot be gain said that Rule 9 of the CCR, 2004 required the invoices of the service provider to contain certain essential particulars - If such essential particulars are found in the invoices, the CENVAT credit taken on the basis of such documents cannot be denied for want of other particulars - This is the mandate of Rule 9(2) of the CCR, 2004 following Imagination Technologies India P. Ltd. vs. Commissioner 2011 (4) TMI 406 - CESTAT, MUMBAI - so long as tax-paid nature of service is established and input service was utilized for providing output service, credit cannot be denied on the input service on the mere ground of non-mention of registration number in the invoices - waiver of pre-deposit granted recovery stayed till the disposal Stay granted.

Summary

Issues:
Waiver and stay of adjudged dues including CENVAT credit denial for specific periods, validity of invoices for CENVAT credit, interpretation of Rule 9 of CENVAT Credit Rules, 2004.

Analysis:
The judgment pertains to applications seeking waiver and stay of adjudged dues, including CENVAT credit denial for specific periods. The appellant contested the demand primarily on the basis that the credit of service tax paid on sales commission to a group company was rightfully taken as credit of 'Business Auxiliary Service' (BAS) under a relevant agreement. The appellant argued that the terms of the agreement clearly indicated the nature of services rendered by the group company and fell within the definition of BAS. The learned Superintendent (AR) proceeded on the premise that the service on which CENVAT credit was taken is an 'input service' as defined under Rule 2(l) of the CENVAT Credit Rules, 2004. The main contention revolved around the acceptability of the invoices based on which the credit was taken, as per Rule 9 of the CENVAT Credit Rules.

The adjudicating authority found that the invoices did not contain essential particulars of the service provider, rendering them unacceptable for CENVAT credit purposes. The appellant argued that denial of CENVAT credit on technical grounds was unwarranted since the payment of service tax on the input service was not in dispute. The appellant relied on previous tribunal orders to support this argument. On the other hand, the Superintendent (AR) emphasized that any document not conforming to the requirements of Rule 9 would not be valid for CENVAT credit purposes. She contended that the invoices lacked essential particulars as stipulated under Rule 9, justifying the denial of CENVAT credit based on such documents.

After considering the submissions, the Tribunal acknowledged the requirement of Rule 9 for invoices to contain essential particulars. However, the Tribunal also noted the precedent set by previous decisions, particularly the case of Imagination Technologies, which favored the service recipient in similar situations. The Tribunal highlighted that as long as the tax-paid nature of the service is established and the input service was utilized for providing output service, credit cannot be denied solely on the grounds of missing registration numbers in the invoices. Therefore, the Tribunal inclined towards granting waiver of pre-deposit and stay of recovery against the impugned demands based on the cited decisions and legal principles.

In conclusion, the stay applications were allowed except for a specific amount denied on outward transportation of goods, which the appellant was directed to deposit within a specified timeframe. The Tribunal's decision was based on the interpretation of Rule 9 of the CENVAT Credit Rules, previous tribunal decisions, and the principle that denial of CENVAT credit should not be solely based on technical deficiencies in the invoices.