2008 (12) TMI 114 - AT - Service Tax

Credit on the basis of invoices issued by their Input Service Distributor (ISD) which was not registered - whether such ISD invoices which allegedly do not contain specific information, can be regarded as valid documents to avail the CENVAT credit - appellant submits that the appellants had applied for centralized registration and request therefore was rejected wrongly by revenue but restored subsequently appellant submits that the registration certificate was not available because of lapse on the part of Revenue further submission is that defects in invoice are procedural and these are rectifiable held that the effective date of validity of the registration certificate is to be considered matter remanded to Commissioner to decide whether the defects are rectifiable and if yes, have been rectified

Issues:
1. Entitlement of credit based on ISD invoices.
2. Validity of ISD invoices under CENVAT credit rules.
3. Rectifiability of omissions in invoices.
4. Consideration of effective date of registration certificate.
5. Remand for reconsideration by Commissioner.

Entitlement of credit based on ISD invoices:
The main issue in this case was whether the assessee is entitled to avail credit based on ISD invoices issued by their Shared Service Centre, Kolkata, which was not registered as an Input Service Distributor (ISD) during the material period. The question also arose regarding the validity of ISD invoices that allegedly lacked essential information required under the Service Tax Rules. The invoices did not contain the registration number of the ISD, were not pre-printed, and did not include necessary details like the name of the taxable service provided, invoice numbers, dates, and service tax payments. The Tribunal considered these aspects to determine the eligibility of the appellant for credit.

Validity of ISD invoices under CENVAT credit rules:
The Tribunal heard arguments from both sides, where the advocate for the appellant highlighted that the centralized registration application was initially denied but later granted based on a clarification from the Board. It was argued that the delay in registration was due to Revenue's actions, and the omissions in the invoices were rectifiable procedural issues. The Tribunal found merit in the appellant's arguments, noting that the credit was taken after a significant delay following the application for centralized registration. The Tribunal agreed that the defects in the invoices were procedural and rectifiable, leading to the decision to proceed with the appeal without pre-deposit.

Rectifiability of omissions in invoices:
The Tribunal acknowledged the advocate's submission that the omissions in the invoices were rectifiable and that there was no evidence to suggest that input services were not received. It was emphasized that the defects were mainly procedural in nature and could be corrected. The Tribunal considered the circumstances surrounding the delayed registration and the subsequent confusion regarding the appellant's eligibility for registration, leading to the conclusion that the demand for service tax credit and the imposed penalty were unwarranted.

Consideration of effective date of registration certificate:
During the proceedings, the advocate referred to a decision of the Hon'ble High Court of Gujarat stating that invoices did not need to contain all details and emphasized the importance of considering the effective date of the registration certificate as per statute. It was highlighted that the Commissioner needed to assess whether the defects in the invoices were rectifiable and if they had been corrected. These factors were deemed essential for the Commissioner to reconsider the issue in light of legal precedents, statutory provisions, and relevant factors.

Remand for reconsideration by Commissioner:
Ultimately, the Tribunal remanded the matter to the Commissioner for a reassessment of the issue, providing an opportunity for the respondent to present their case considering judicial precedents, legal provisions, and other relevant factors. The decision to remand the case aimed to ensure a comprehensive review of the situation and a fair consideration of all aspects before reaching a final conclusion.

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