2016 (6) TMI 614 - AT - Central Excise

Cenvat Credit in respect of supplementary invoice issued by the service provider for payment of service tax for the past period - Commissioner (Appeals) allowed the Cenvat Credit on the ground that the restriction provided under Rule 9(1) (b) of Cenvat Credit Rules was not applicable in respect of service tax paid whereas the same was applicable to the inputs and capital goods.Held that - As during the relevant period of this case, Rule 9(1) (b) of Cenvat Credit Rules, 2004, does not put any restriction for availing the Cenvat Credit on the supplementary invoice in respect of input services received by the assessee. Admittedly, the restriction was brought by insertion of Sub-clause (bb) of Rule 9(1) of Cenvat Credit Rules w.e.f. 1.4.2011. Therefore prior to 1.4.2011 the credit cannot be denied borrowing the restriction provided in unamended Rule 9(1). This proposition has been endorsed by the various Tribunal decision as cited by the Ld. Counsel. - Decided in favour of assessee

Summary

Issues:
1. Entitlement to avail Cenvat Credit on a supplementary invoice for service tax payment.

Analysis:
The appeal challenged the Order-in-Appeal that set aside the Order-in-Original and allowed the respondent's appeal regarding Cenvat Credit. The main issue was whether the respondent could claim Cenvat Credit for a supplementary invoice issued by the service provider for past service tax payment. The adjudicating authority initially denied the credit based on Rule 9(1)(b) of Cenvat Credit Rules 2004, citing reasons like suppression of facts or fraud. However, the Ld. Commissioner (Appeals) allowed the credit, stating that the restriction under Rule 9(1)(b) did not apply to service tax payments, unlike inputs and capital goods.

The Assistant Commissioner for the Revenue argued that Rule 9(1)(b) was the only provision for allowing Cenvat Credit on a supplementary invoice, and it should apply to service tax as well. On the contrary, the respondent's counsel highlighted that Rule 9(1)(b) restricted Cenvat Credit only for inputs or capital goods during the period in question (July 2005 to January 2009). The counsel pointed out that the specific amendment inserting Sub-clause (bb) in Rule 9(1) for service tax came into effect from 1.4.2011. The counsel referenced previous Tribunal decisions supporting this interpretation.

The Tribunal, after considering both sides' arguments, noted that Rule 9(1)(b) of Cenvat Credit Rules 2004 did not impose any restrictions on availing Cenvat Credit for supplementary invoices related to input services before the amendment on 1.4.2011. The Tribunal cited previous decisions to support this view and upheld the Ld. Commissioner (Appeals)'s order, dismissing the Revenue's appeal. The cross-objection was also disposed of accordingly.