2017 (11) TMI 877 - AT - Central Excise

CENVAT credit - air travel agent service - duty paying documents - whether on the basis of invoices issued by the travel agent having enclosed the e-ticket showing the amount of service tax paid on the e-ticket by the airlines, the appellant is entitled to avail CENVAT credit in terms of Rule 9(2) of CCR, 2004 or not? - Held that - It is an admitted fact that the e-ticket has been issued for travel of the appellant only and on which service tax has been paid. The said service tax has been borne by the appellant only. On the basis of this e-ticket issued by airlines and the commission shown by the travel agent in their invoice, the appellant is entitled to avail CENVAT credit under Rule 9(2) of CCR, 2004, as it is not disputed that appellant has not availed the services and not paid the service tax - reliance placed in the case of Patel Air Freight Versus Commissioner of C. Ex., Cus. & S.T., Hyderabad-II 2017 (1) TMI 803 - CESTAT HYDERABAD - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of CENVAT credit on air travel agent service invoices under Rule 9(2) of CENVAT Credit Rules, 2004.

Analysis:
The appellant contested the denial of CENVAT credit on air travel agent service invoices, arguing that the invoices issued by the travel agent, including the e-ticket showing the service tax paid by the airlines, should entitle them to avail the credit under Rule 9(2) of CENVAT Credit Rules, 2004. The Tribunal considered the core issue of whether the appellant could claim CENVAT credit based on the e-ticket and commission shown in the travel agent's invoice. It was established that the service tax on the e-ticket was borne by the appellant, who had not availed the services or paid the service tax. Referring to a previous case, the Tribunal emphasized that the essential requirements of the procedural Rule should be met, and minor inadequacies in the document availed for credit should be overlooked as per the Proviso to sub-rule (2) of Rule 9. The Tribunal concluded that the appellants were entitled to avail CENVAT credit on the invoices and e-tickets issued by the airlines under Rule 9(2) of CCR, 2004, based on the settled issue in the case of Patel Air Freight. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential relief.

Overall, the judgment clarified the entitlement of the appellant to claim CENVAT credit on air travel agent service invoices, highlighting the importance of meeting procedural requirements and overlooking minor document inadequacies as per the relevant Rule. The decision was based on the precedent set in a previous case, emphasizing the unique business practices in the airline industry and the need to understand such practices before denying benefits on insubstantial grounds.