2015 (11) TMI 209 - AT - Central Excise

Benefit of CENVAT credit - Credit availed on the basis of debit notes - Non production of valid documents - Invocation of extended period of limitation - Held that - Appellants were directed by the audit team to produce the relevant invoices before the range authorities, which action gets completed by April 2006. In spite of that, show-cause notice stands issued after a gap of around 4 years, that too without making any reference to the fact of filing of invoices and the verification of the same by the Range Superintendent. The notice is issued on the sole ground that the said invoices were not produced before the audit team. Needless to say that the appellant s Range authorities were under a duty to verify the said invoices and to extend the benefit to the assessee, based upon the same. In any case, the observations of the appellate authority that the registration number does not stand mentioned in the said invoices, cannot be adopted by the Revenue as an excuse to deny the credit, especially in the absence of any allegation, much less with any allegation to the effect that service tax does not stand paid by the service provider and service does not stand received by the appellant. As such, I find no reasons to deny the credit to the appellant. There is no justification for the Revenue to take a period of 4 years to issue the show-cause notice that too without verification of the documents submitted by the appellant. The credit was being availed by the assessee by reflecting the same in the monthly returns which were being regularly filed by the appellant. In such a scenario, no mala fide intention, with any intent to evade, suppress or mis-state the facts can be attributed to the appellant so as to invoke longer period of limitation. I accordingly hold that the demand being raised after normal period of limitation is barred. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Availment of CENVAT credit on service tax paid on input services without producing valid documents.
2. Show-cause notice alleging non-production of valid documents and subsequent denial of credit.
3. Observations by original adjudicating authority and Commissioner(Appeals) regarding deficiencies in invoices and imposition of penalty.
4. Arguments by the appellant's advocate on non-mention of registration number in invoices, jurisdiction, and limitation.
5. Revenue's counterarguments on deficiencies in invoices and limitation.
6. Tribunal's decision on merits and limitation, justification for issuance of show-cause notice after a delay, and denial of credit.

Analysis:
1. The appellant, engaged in manufacturing piston and piston rings, availed CENVAT credit on service tax paid on input services in May 2005. An audit revealed credit availed on the basis of debit notes, leading to a demand for production of relevant invoices.
2. Subsequently, the appellant produced all invoices before the Range Superintendent in April 2006. However, a show-cause notice in March 2010 alleged non-production of valid documents in 2005, leading to a demand for recovery of the credit.
3. The original adjudicating authority confirmed the demand and penalty, upheld by the Commissioner(Appeals) citing deficiencies in invoices. The Commissioner observed insufficiencies like missing service tax registration and serial numbers in the invoices.
4. Appellant's advocate argued that non-mention of registration number was not the subject of the show-cause notice. He highlighted jurisdictional issues and the timeliness of the notice issuance after the production of invoices.
5. Revenue's representative pointed out deficiencies in invoices as making them ineligible for credit and supported the findings of the lower authorities on limitation.
6. The Tribunal found in favor of the appellant, noting that the invoices were produced before the Range Superintendent as directed, and the delay in issuing the show-cause notice without verifying the documents rendered it unjustified. The Tribunal held that deficiencies in invoices should not be used as an excuse to deny credit, especially without evidence of non-payment of service tax or non-receipt of services. The demand raised after the normal limitation period was deemed barred, and the impugned order was set aside, allowing the appeal with consequential relief to the appellant.