2018 (11) TMI 153 - AT - Central Excise

CENVAT Credit - duty paying invoices - appellant have availed Cenvat credit of service tax paid on railway freights on the basis of photocopies of railway receipt and a certificate of payment of service tax issued by the railway authorities - Rule 9 of Cenvat Credit Rules, 2004 - Held that - The legislative has recognised the validity of the certificates which are being issued by the Railway Authorities certifying the payment of service tax by the appellants. Thus, there has been no contravention of Rule 9 of Cenvat Credit Rules and the appellants have rightly availed the Cenvat credit of the service tax paid by them on the freight amount paid to the Railway Authorities. The substantial benefit cannot be denied to the appellant only because certain procedural requirements as prescribed by the rules have not been followed in toto - all the particulars of service tax paid by the appellants for available and same has been certified by the concerned Railway Authorities, therefore, it will be travesty of the judgment if the Cenvat credit is denied to them only on such a flimsy ground. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availing Cenvat credit of service tax paid on railway freights based on documents not considered valid under Rule 9 of Cenvat Credit Rules, 2004.
- Interpretation of Rule 9 (2) regarding the validity of documents for availing Cenvat credit.
- Compliance with the proviso to Rule 9 (2) in relation to the documents provided for claiming Cenvat credit.
- Impact of the amendment under Rule 9 (1) (fa) on the eligibility of certificates issued by Railway Authorities for availing Cenvat credit.

Analysis:

The judgment involves the issue of availing Cenvat credit of service tax paid on railway freights using documents not deemed valid under Rule 9 of Cenvat Credit Rules, 2004. The Tribunal previously passed an order setting aside the impugned order and remanding the case for re-examination of the appellant's claim for credit based on the documents submitted. The Tribunal emphasized that if all essential details required for availing credit are present in the documents, denial of credit for minor procedural lapses would be unjustified. The Tribunal directed the original authority to reevaluate the claim within three months, providing the appellant with an opportunity to present necessary documents and defenses.

Regarding the interpretation of Rule 9 (2), the Tribunal highlighted the proviso which allows for the acceptance of documents lacking certain particulars if the Deputy Commissioner or Assistant Commissioner is satisfied that the goods or services covered have been received and accounted for. The Tribunal emphasized the importance of compliance with the proviso to Rule 9 (2) for availing Cenvat credit, stressing that documents containing all essential details are considered valid for credit under Rule 3 of Cenvat Credit Rules, 2004.

The judgment also analyzed the compliance with the proviso to Rule 9 (2) in relation to the documents provided by the appellant for claiming Cenvat credit. The Tribunal found that the certificate issued by Railway Authorities contained all required details as per the proviso, making it a valid document for availing the credit. The Tribunal noted that the legislative recognition of such certificates further supported the appellant's right to claim Cenvat credit for service tax paid on freight to Railway Authorities.

Moreover, the judgment discussed the impact of the amendment under Rule 9 (1) (fa) on the eligibility of certificates issued by Railway Authorities for availing Cenvat credit. The Tribunal observed that the necessary compliance with the proviso to Rule 9 (2) was evident in the documents provided by the appellant, and the legislative acknowledgment of such certificates reinforced the validity of the appellant's claim for Cenvat credit. The Tribunal cited a previous decision to support the appellant's position, emphasizing that denial of credit based on procedural lapses would be unjustified if all essential details were present in the documents.

In conclusion, the Tribunal set aside the impugned orders, finding them devoid of merit, and allowed the appeals, affirming the appellant's right to claim Cenvat credit for service tax paid on freight to Railway Authorities based on valid documents containing all essential particulars as required by the rules.