2014 (8) TMI 342 - AT - Service Tax

Denial of CENVAT Credit - Credit on the strength of debit notes - Held that - appellant has not received the services and it is also not in dispute that the service tax has not been paid on these services. Further, all the requirements to avail Cenvat credit are entered in the debit note and further debit note has been rectified by issuing invoice. - Following decision of THE SUPREME INDUSTRIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE LTU, MUMBAI 2014 (2) TMI 159 - CESTAT MUMBAI - Decided in favour of assessee.

Summary

Issues: Denial of Cenvat credit based on the use of a debit note as a document for availing credit.

Analysis:
The appellant appealed against the denial of Cenvat credit based on using a debit note, deemed improper under Rule 9 of the CENVAT Credit Rules, 2004. The authorized representative argued that all necessary requirements for availing the credit were met, even though no service was received or service tax paid. They cited The Supreme Industries Ltd. decision to support their claim.

The lower authorities contended that a debit note is not a valid document for claiming Cenvat credit. However, after considering both sides, the judge noted that the appellant had not received services or paid service tax, yet all credit requirements were fulfilled in the debit note, which was subsequently rectified by issuing an invoice. Citing The Supreme Industries Ltd. decision, the judge ruled in favor of the appellant, holding them entitled to the Cenvat credit.

As a result, the impugned order denying the credit was set aside, and the appeal was allowed with consequential relief.