2018 (6) TMI 1068 - AT - Central Excise

CENVAT credit - duty paying documents - supplementary invoices - Contention of the department is that at the relevant time there was no provision for allowing credit on the strength of supplementary invoices - Rule 9 of Cenvat Credit Rules, 2004 - Held that - With this invoice it cannot be ascertained that the appellant have not received the services, no co-relation was submitted by the appellant between the original invoices for service charges and the present invoices for the service tax payment. Therefore, in absence of such co-relation it cannot be established that the credit taken by the appellant is in respect of those services which have been received by the appellant. The adjudicating authority must verify the subject invoices in the present case with the original invoice raised for the service charges which are detailed in the statements enclosed with the invoices - appeal allowed by way of remand.

Summary

Issues:
- Availing CENVAT Credit based on supplementary invoices
- Interpretation of Rule 9 of Cenvat Credit Rules, 2004
- Verification of co-relation between original service invoices and supplementary service tax payment invoices

Analysis:
1. The case involved the appellants availing CENVAT Credit based on supplementary invoices issued during July 2007. The department contended that credit on such invoices was disallowed as there was no provision for allowing credit on supplementary invoices at that time. The dispute revolved around whether the subject invoices were indeed supplementary invoices.

2. The appellant argued that the bills in question were not supplementary invoices as they were raised only against payment of service tax not paid at the time of original invoices during 2005-06 and 2006-07. Even if considered supplementary, the appellant claimed that Rule 9(1) of the Cenvat Credit Rules, 2004 covered these invoices as they were the only evidence of service tax payment, hence credit should not be disputed.

3. The appellant further contended that the subject invoices were raised only for payment of differential service tax on bills where no service tax was initially paid. They relied on precedents allowing CENVAT Credit for supplementary bills and argued that all required information was present in the invoices as per Rule 4A of Service Tax Rules, 1994.

4. The Revenue reiterated that the invoices did not co-relate with the original service contracts, making it challenging to establish if the service tax paid was for services received by the appellant. They argued that mere presentation of supplementary invoices did not warrant credit approval, supporting the disallowance of credit by the appellate authority.

5. The Tribunal observed that while the appellant received service charge bills during 2004-07 without service tax payment, subsequent payment led to consolidated service tax bills. However, without a clear co-relation between the original service invoices and the tax payment invoices, it was uncertain if the credit was for services actually received. The matter was remanded to the adjudicating authority for verification, emphasizing the need for establishing the receipt of services and payment records.

6. The judgment concluded by remanding the case for further verification to determine the validity of the CENVAT Credit claimed. The appellant was instructed to provide necessary records to establish the receipt of services and payment of service provider bills, ensuring a fair opportunity for personal hearing and document submission.

This detailed analysis covers the issues of availing CENVAT Credit based on supplementary invoices, the interpretation of Rule 9 of Cenvat Credit Rules, 2004, and the crucial verification of co-relation between original service invoices and supplementary service tax payment invoices, as addressed in the legal judgment by the Appellate Tribunal CESTAT MUMBAI.