2017 (5) TMI 1382 - AT - Central Excise

CENVAT credit - duty paying invoices - whether the CENVAT Credit in respect of Service Tax paid on the rent of the premises is admissible on the debit note issued by the premises owner? - Held that - the debit note on which the credit was availed has contained all the information which is required in terms of Rule 4 of the STR, 1994 - reliance was placed in the case of Vodafone Essar Spacetel Ltd. 2016 (1) TMI 24 - CESTAT KOLKATA , where it was held that any document which contains the details prescribed u/r 4A(1) of the STR, 1994, the same can be considered as the invoice or challan and will be a proper document for availing the CENVAT Credit - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Admissibility of CENVAT Credit on Service Tax paid on rent through a debit note.

Analysis:
1. Issue of Admissibility of CENVAT Credit: The main issue in this case was whether CENVAT Credit for Service Tax paid on the rent of premises through a debit note issued by the premises owner is admissible under Rule 9 of the Cenvat Credit Rules, 2004. The lower authorities had denied the credit, arguing that a debit note is not a valid document for availing CENVAT Credit.

2. Appellant's Argument: The appellant's counsel argued that the debit note clearly showed that Service Tax was paid as per the Leave and License agreement between the appellant and the property owner. The debit note contained all necessary information, including the Service Tax amount and the lessor's Service Tax registration. The appellant relied on various judgments where credit on debit notes had been allowed, such as Grasim Industries Ltd., Jalaram Plastic Pack, Jaquar & Co. Ltd., and Vodafone Essar Spacetel Ltd.

3. Revenue's Argument: The Revenue contended that the credit and debit note were not admissible as proper documents for allowing the credit. They cited judgments like Friends & Friends Shipping Pvt. Ltd., Godrej Consumer Products Ltd., and India Gateway Terminal (P) Ltd. to support their position.

4. Judgment Analysis: The presiding member analyzed the debit note and found that it contained all necessary information required under Rule 4 of the Service Tax Rules, 1994. The Tribunal had previously allowed credit on debit notes in various decisions, supporting the appellant's case. The judgments cited by the Revenue were distinguished based on the specifics of each case. For instance, in the case of Friends & Friends Shipping, the service details were not mentioned in the debit note, unlike the present case. The judgment in the case of Vodafone Essar Spacetel Ltd. held that any document with details prescribed under Rule 4A(1) of the Service Tax Rules could be considered as an invoice or challan for availing CENVAT Credit. Therefore, the impugned order was set aside, and the appeal was allowed.

This detailed analysis highlights the arguments presented by both sides, the examination of relevant legal provisions, and the application of past judgments to arrive at the decision regarding the admissibility of CENVAT Credit on Service Tax paid through a debit note.