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2018 (6) TMI 1302 - AT - Service TaxCENVAT credit - non-registered dealers - whether the assessee can claim CENVAT on the basis of invoices issued by dealers who are not registered at the time of issuing the invoices? - penalty - Held that - The appellant is not entitled to CENVAT Credit on the basis of invoices issued by the unregistered dealers in view of the restrictions under Rule 9 of the CENVAT Credit Rules. Therefore, the appellant has violated CENVAT Credit Rules, 2004 by availing credit on the basis of an ineligible documents and the same is recoverable from them - By taking credit of ineligible document the appellant have rendered themselves liable to penalty. Abatement of value - N/N. 1/2006/ST - If the assessee is not entitled to the CENVAT Credit whether he can claim the benefit of abatement of value under N/N. 1/2006/ST by virtue of the fact that they have not availed CENVAT Credit? - Held that - The Learned Commissioner (Appeals) has held that there is no provision in the notification to allow retrospectively of the abatement of value and he cannot modify the provisions of this notification. There is nothing in the appeal in which the appellant has countered this argument and explained how they were eligible for benefit of abatement under N/N. 1/2006/ST retrospectively. Appeal dismissed - decided against appellant.
Issues:
1. Applicability of CENVAT credit on invoices issued by unregistered dealers. 2. Imposition of penalty for availing credit on ineligible documents. 3. Entitlement to abatement under notification No. 1/2006/ST. Analysis: Issue 1: Applicability of CENVAT credit on invoices issued by unregistered dealers The appellant, a service provider in Hyderabad, availed CENVAT credit based on invoices from dealers not registered during the relevant period. The Tribunal examined whether such credit was admissible. The Departmental Representative argued that CENVAT credit cannot be taken on invoices from unregistered dealers, even if they later register. Relying on precedents, the Tribunal held that such invoices are not valid for CENVAT Credit under Rule 9 of the CENVAT Credit Rules. The Tribunal affirmed that officers and the Tribunal cannot modify these rules. Citing previous cases, the Tribunal concluded that no CENVAT Credit is admissible on invoices from unregistered dealers. Issue 2: Imposition of penalty for availing credit on ineligible documents The Tribunal found that the appellant violated the CENVAT Credit Rules by availing credit on ineligible documents, making them liable for recovery of the credit and penalty. Upholding the decision of the Order-in-Original and Order-in-Appeal, the Tribunal maintained the appellant's liability for CENVAT Credit on disputed invoices, interest, penalty, and invoking the extended time period. Issue 3: Entitlement to abatement under notification No. 1/2006/ST Regarding the benefit of abatement under notification No. 1/2006/ST, the Tribunal noted that the appellant failed to demonstrate eligibility for retrospective abatement of value. The Tribunal upheld the decision of the Learned Commissioner (Appeals) that there was no provision in the notification for retrospective abatement. As the appellant did not counter this argument effectively, the Tribunal rejected the appeal, affirming the denial of abatement under the notification. In conclusion, the Tribunal rejected the appeal, emphasizing that the appellant was not entitled to CENVAT Credit on invoices from unregistered dealers, upholding the penalty for availing credit on ineligible documents, and denying the benefit of abatement under notification No. 1/2006/ST due to lack of retrospective eligibility explanation by the appellant.
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