2018 (5) TMI 1520 - AT - Service Tax

CENVAT credit - fake invoices - credit availed prior to registration - the appellant had registered themselves on 02.05.2013 but availed service tax credit on an invoice issued earlier - Held that - the service tax registration No, mentioned in the invoice belongs to M/s Swaraj Construction, who has provided the service - On the issue of service tax registration obtained subsequently by the appellant, eligibility to credit on the invoices issued earlier, it is no more res-integra being covered by the aforesaid decisions of the Tribunal, wherein it has been held that non possession of service tax registration at the time of receipt of services would not debar from availing the credit after obtaining the service tax registration. There is no dispute that the services were received and utilized by the Appellant. Further, because the detailed description of service rendered being not mentioned in the input service, it cannot become a sale transaction - credit cannot be denied. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against order-in-appeal passed by Commissioner of Central Excise, denial of credit of Service Tax, discrepancy in service tax registration numbers, eligibility of credit on invoices issued before obtaining service tax registration, nature of transaction in case of missing details in invoice.

Analysis:
The appeal was filed against the order-in-appeal passed by the Commissioner of Central Excise (Appeals-I), Vadodara, regarding the denial of credit of Service Tax. The appellant had availed credit based on an invoice issued by M/s Swaraj Construction, but the department alleged that the invoice was fake as the appellant registered after the invoice date. The Ld. Advocate for the appellant argued that the service tax registration number on the invoice belonged to M/s Swaraj Construction, not the appellant, and provided evidence supporting this claim. He also contended that delay in obtaining service tax registration should not disentitle them from availing credit, citing relevant tribunal judgments.

The Revenue supported the findings of the Ld. Commissioner (Appeals) regarding the denial of credit. However, the Tribunal found that the service tax registration number on the invoice belonged to the service provider, M/s Swaraj Construction, and not the appellant. The Tribunal also referred to previous decisions stating that non-possession of service tax registration at the time of service receipt does not prevent credit availing after obtaining registration. Since the services were received and utilized by the appellant, the credit was deemed eligible. Moreover, the missing detailed description in the invoice did not make it a sale transaction, and the service tax paid on such service was eligible for credit. Consequently, the impugned order was set aside, and the appeal was allowed.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that the denial of credit based on the discrepancy in service tax registration numbers was unfounded. The judgment highlighted the importance of service receipt and utilization for credit eligibility, regardless of the timing of service tax registration. Additionally, it clarified that missing details in an invoice do not negate the eligibility of service tax credit if the service was indeed provided and utilized.