2017 (3) TMI 612 - AT - Service Tax

CENVAT credit - credit was availed on input service on the strength of debit notes, letters, bills, vouchers and other documents issued by service providers on which details like Serial No. Registration No. of service provider were not mentioned. Department entertained a view that credit is not admissible on the above documents - time limitation - Held that - The amendment in Rule 4 (A) of Service Tax Rules, 1994 was brought forth making it mandatory to include the registration no. of the service provider in the invoices only with effect from 2011. Whereas the department has issued the SCN for the period from 2007-2011 in the year 2011 Major portion of the demand is beyond normal period. Further in the reply to SCN itself, the appellant has furnished all details with regard to the credit availed by them and also clarified the short comings in the documents. The department does not have a case that the credit is otherwise not eligible to the appellants. So also there is no case for the department that appellant has not properly accounted for the credit availed by them - The appellant succeeds both on merits as well as on limitation - appeal allowed - decided in favor of appellant.

Summary

Issues:
Disallowance of CENVAT Credit on input services due to improper documents.

Analysis:
1. The appeal was filed against the Commissioner (Appeals) order upholding the disallowance of CENVAT Credit on input services.
2. The appellants availed credit on input services during 2007-2008 to 2010-2011 based on documents lacking details like the service provider's registration number. A show cause notice was issued in 2012 leading to confirmation of disallowance, recovery of the credit amount, interest, and penalty by the original authority and Commissioner (Appeals).
3. The appellant argued that the mandatory requirements for invoices were introduced in 2011, post the period in question, and the omission of the registration number does not imply an intention to evade tax. They provided detailed replies and certified copies of documents, citing Rule 9 of CENVAT Credit Rules, 2004, and previous judgments supporting credit on debit notes.
4. The department contended that the documents were improper and lacked necessary details, justifying the denial of credit. They argued against allowing credit on debit notes.
5. The judge noted that the show cause notice invoked an extended period, alleging inadequate document details. The appellant had furnished necessary details and clarified document shortcomings in their reply. Previous judgments supported the appellant's eligibility for credit despite missing registration numbers. The judge ruled in favor of the appellant, stating no evidence of fraud or intent to evade tax, rendering the notice invoking an extended period unsustainable.
6. Citing previous judgments, including M/s Emmes Metals Pvt Ltd., the judge held the appellant eligible for credit, overturning the impugned order. The appellant succeeded on both merit and limitation grounds, and the appeal was allowed with consequential reliefs.

This detailed analysis covers the issues involved in the judgment regarding the disallowance of CENVAT Credit on input services due to improper documents, highlighting the arguments presented by both parties and the judge's ruling based on legal precedents and interpretations.