2018 (4) TMI 60 - AT - Central Excise

CENVAT credit - duty paying invoices - whether the appellant assessee have rightly taken CENVAT credit based on ISD invoices Issued by the then head offices during the period August, 2010 to April, 2011? - Held that - the courts below have rejected the Cenvat credit mechanically without application of mind - It is admitted fact that the relevant invoices were available with the appellant at the time of inspection of audit by the Revenue. No errors have been found in any of the invoices and audit found the wanting details. As required, the requisites of the ISD invoice contain all the details prescribed under Rule 4A(2) of S.T.R. 1994 read with Rule 9 of CCR, 2004 - It is admitted fact that the appellant had given all the invoices, details during the course of enquiry as have been observed in the SCN as well as in the Order-in-Original. The nonavailability of enclosures at the time of audit with the ISD invoice does not disentitle the appellant from taking the credit. Circular No.345/2/2000/TRU dated 29 th August, 2000 provides that Cenvat credit can be taken at any time after receipt of inputs and input services along with the duty paying documents. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellant assessee rightly took Cenvat credit based on ISD invoices from August 2010 to April 2011.

Analysis:
The appellant, engaged in manufacturing, availed Cenvat credit on input services and capital goods. The dispute arose when auditors found discrepancies in the invoices issued by the Input Service Distributor (ISD). The authorities alleged non-compliance with Rule 7 & 7A of CCR, 2004 and Rule 4 A (2) of S.T. R., 1994. The appellant failed to produce evidence supporting compliance with ISD invoice requirements, leading to a show cause notice demanding recovery of credit and imposing penalties. The appellate authority upheld the disallowance, citing lack of supporting documents and failure to produce annexures of disputed invoices. Additionally, the denial of credit for capital goods under chapter 73 was supported by the absence of necessary documentation proving their classification as such.

The appellant contested the denial of Cenvat credit, arguing that the ISD invoices contained all required particulars, as mandated by Rule 4A(2) of the Service Tax Rules. They highlighted that enclosures were provided to the Range Superintendent, fulfilling the rule's requirements. The appellant emphasized that the delay in credit distribution by ISD did not justify denial of credit. The absence of a specific time limit for availing credit under the relevant provisions was crucial in their argument.

The Tribunal acknowledged that the lower authorities mechanically rejected the Cenvat credit without proper assessment. It noted that the appellant had provided detailed particulars and copies of invoices during the audit. The Tribunal emphasized that the ISD invoices contained all necessary details as per Rule 4A(2) and Rule 9 of CCR, 2004. The absence of enclosures during the audit did not disentitle the appellant from claiming credit. Referring to Circular No. 345/2/2000/TRU, the Tribunal allowed the appeal, setting aside the impugned order and granting the appellant consequential benefits.