2016 (8) TMI 882 - AT - Central Excise

Cenvat credit - service tax paid on various input services - recovery of credits wrongly taken along with interest and imposition of penalty under Rule 15(1) of CCR 2004 - Held that - the law has recognized that in case of Banking Company, it is neither possible nor practical for the said company to provide an invoice for the charges it levies and vide Notfn No.30/2004-ST dt. 22.09.2004, it has been provided that a banking company or a financial institution including a non-banking financial company, or any other body corporate or commercial concern, providing service to a customer, in relation to banking and other financial services, an invoice, a bill or, as the case may be, challan shall include any document, by whatever name called, whether or not serially numbered, and whether or not containing address of the person receiving taxable service but containing other information in such documents as required under this sub-rule. In view of the amendment brought vide circular , the appellant had rightly availed credit on the basis of the certificate issued by the Bank - Decided partly in favour of appellant

Summary

Issues:
- Availing of cenvat credit on various input services
- Alleged ineligible credits during a specific period
- Disallowance and recovery of wrongly taken credits
- Imposition of penalty under Rule 15 (1) of CCR 2004
- Appeal against the order of the adjudicating authority
- Interpretation of law regarding invoicing for banking companies
- Applicability of Notfn No.30/2004-ST
- Modification of the original order by the Commissioner (Appeals)
- Final decision and relief granted by the Tribunal

Analysis:
The appellant, a 100% Export Oriented Unit engaged in the manufacture and export of "Gherkins," availed cenvat credit of service tax paid on various input services. The department alleged that during April 2012 to June 2012, the appellant had availed ineligible cenvat credits amounting to Rs. 1,17,127. A show cause notice was issued proposing disallowance and recovery of these credits, along with interest and penalty under Rule 15 (1) of CCR 2004. The Asst. Commissioner of Central Excise disallowed credit of Rs. 1,20,655, ordered recovery, and imposed a penalty. The appellant appealed before the Commissioner (Appeals), who modified the original order, allowing credit of Rs. 3528 and reducing interest and penalty.

During the appeal before the Tribunal, it was argued that banking companies face challenges in providing invoices for charges levied. Notfn No.30/2004-ST allowed banking companies to issue documents containing necessary information, even if not serially numbered or containing the address of the recipient. The appellant had availed credit based on a certificate issued by the bank amounting to Rs. 1,03,939. The Tribunal upheld most of the demands but modified the order to allow credit based on the banking company's certificate. The appellant did not press for the demand of Rs. 748. The Tribunal partly allowed the appeal, modifying the impugned order accordingly.

In conclusion, the Tribunal recognized the challenges faced by banking companies in invoicing and allowed credit based on the certificate issued by the bank. The original order was modified to grant relief to the appellant, upholding most demands but allowing credit based on the banking company's certificate. The appeal was partly allowed by the Tribunal.