2016 (6) TMI 281 - AT - Service Tax

Eligibility of Cenvat credit - duty paying document - Services of commercial training and coaching - invoices found to be not eligible documents for availing credit - Held that - it is found that the sample verification of the copies of invoices issued by the manufacturer and the re-sellers indicates the clear link between the duty paid goods supplied by the manufacturer and received by the appellant. Therefore, no justification found to deny the credit to the appellant. Accordingly, the impugned order is set aside. - Decided in favour of appellant

Summary

Issues:
Eligibility of the appellant for cenvat credit on paper.

Analysis:
The appellants, engaged in providing taxable services of commercial training and coaching, were denied cenvat credit on paper by the Original Authority due to invoices issued by non-manufacturers. The Commissioner (Appeals) upheld the denial, leading to the present appeal. The appellant argued that the paper was supplied by the manufacturer through intermediaries, with clear linking between the manufacturer's invoices and the re-sellers' VAT invoices. Reference was made to previous Tribunal and High Court decisions supporting credit based on endorsed invoices. The appellant contended that the denial was solely on technical grounds. The AR, however, cited Rule 9 of Cenvat Credit Rules, stating the documents were invalid for credit.

Upon examination, it was found that the appellants used paper as inputs for taxable services, supplied by local re-sellers with manufacturer invoices indicating re-sellers as consignees but with the appellant's name at the bottom. VAT invoices from re-sellers specified the product as TNPL Cream Wove paper, with cross-references to the manufacturer's invoice. The manufacturer endorsed delivery to the appellant's premises on the invoices, and the re-seller invoices linked back to the manufacturer. The Tribunal observed a clear link between the duty paid goods supplied by the manufacturer and received by the appellant. Consequently, the impugned order was set aside, and the appeal was allowed.

The judgment, delivered by Member (Technical) B. Ravichandran, emphasized the importance of establishing a direct link between the manufacturer, re-sellers, and the appellant to validate cenvat credit on paper used for taxable services. The decision highlighted the significance of proper documentation and endorsement to support credit claims, as evidenced by the clear linking of invoices in this case. The ruling provided clarity on the interpretation of Rule 9 of Cenvat Credit Rules in the context of availing credit based on valid documents, reinforcing the principle that technicalities should not impede legitimate credit claims supported by substantial evidence.