2016 (11) TMI 859 - AT - Central Excise

CENVAT credit - non-registration of supplier at the time of issue of invoices - whether the availment of Cenvat credit by the appellant on the basis of supplementary invoices issued by the service provider, justified? - Held that - Cenvat credits stand allowed by the Tribunal in the case laws cited by the appellant under identical circumstances. In the case of Secure Meters Ltd. Vs. CCE 2010 (1) TMI 284 - CESTAT, NEW DELHI which is on identical facts to the one in present appeals Tribunal has held that it is not correct to deny the service tax credit on the basis of the above mentioned supplementary invoices, just because at the time of receipt of the input services, the input service providers were not registered and had not mentioned Service tax registration no. in the invoices. I find no reason to take a different view in the present appeals - CENVAT credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Availment of Cenvat credit based on supplementary invoices issued by service provider.

Analysis:
The appellant, engaged in cement manufacturing, availed Cenvat credit on inputs and input services, including cargo handling services provided by M/s Singh Transporters. Initially, invoices by the service provider did not include the service tax element as they were not registered for service tax payment. Subsequently, after registration, supplementary invoices were issued for service tax amounts, which the appellant paid and claimed Cenvat credit. Revenue objected, citing Rule 4A of Service Tax Rules, stating invoices must be issued within 14 days. The Commissioner (Appeals) disallowed Cenvat credits, leading to the Tribunal challenge.

Grounds for appeal included that service tax was paid, supplementary invoices were valid, and no Revenue allegations against the service provider. Citing case laws like Secure Meters Ltd. and Delphi Automotive Systems Pvt. Ltd., the appellant argued for Cenvat credit allowance based on the supplementary invoices.

The Tribunal analyzed the issue, noting the service provider's registration post-service provision and delayed supplementary invoices. Despite these lapses, the Tribunal referred to precedents where Cenvat credits were allowed under similar circumstances. Notably, in the case of Secure Meters Ltd., the Tribunal emphasized that if input services were used for taxable output services, even if service tax was paid later under supplementary invoices, credit cannot be denied. Similarly, in Delphi Automotive Systems Pvt. Ltd., it was held that supplementary invoices are valid for Cenvat credit. Consequently, the Tribunal allowed the appeals and set aside the impugned orders, favoring the appellant's claim for Cenvat credit based on supplementary invoices.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the validity of claiming Cenvat credit based on supplementary invoices issued by the service provider, even if there were delays and initial non-compliance with service tax regulations. The decision aligned with established precedents and principles of allowing credit for input services utilized for taxable output services, despite procedural irregularities by the service provider.