2018 (11) TMI 361 - AT - Service Tax

CENVAT credit - input services - duty paying documents - denial on the ground that the appellant has not taken cenvat credit against proper documents as per Rule 9(2) of the Cenvat Credit Rules, 2004 - Held that - As the queries made by the Revenue has been answered by the Estate Office, UT, Chandigarh certifying that they are registered with the Service Tax Department and they have charged service tax from the appellant on the lease rent which have been deposited with the Revenue Department - Considering the said fact that the appellant has paid service tax on lease rent, therefore, the appellant is entitled to avail cenvat credit of the service tax paid on the said service. The appellant has correctly availed cenvat credit of Service Tax paid on lease rent to Estate office, UT, Chandigarh - appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of cenvat credit on paid rent for premises due to lack of proper documents as per Rule 9(2) of the Cenvat Credit Rules, 2004.

Analysis:
The appellant appealed against the denial of cenvat credit on inputs service, specifically rent paid to Chandigarh Administration, citing non-compliance with Rule 9(2) of the Cenvat Credit Rules, 2004. The appellant leased a showroom from the Chandigarh Administration, paid service tax on the rent, and claimed cenvat credit accordingly. However, an audit revealed missing or deficient documents supporting the cenvat credit claim. Consequently, a show cause notice was issued, leading to the denial of cenvat credit after adjudication. The appellant then appealed to the Ld. Commissioner (A), who sought clarification from the Chandigarh Administration regarding service tax recovery and registration as a service provider. Despite the lack of response from the administration, the Ld. Commissioner (A) upheld the denial of cenvat credit, prompting the appellant's further appeal.

The appellant's counsel argued that the Ld. Commissioner (A) failed to consider the Chandigarh Administration's report, necessitating the reversal of the impugned order. Conversely, the respondent's representative contended that the appellant's inadequate document submission justified the denial of cenvat credit. After hearing both parties and reviewing the submissions, the Member (Judicial) noted the appellant's presentation of a letter from the Estate Office, UT, Chandigarh, responding to the Revenue Department's queries. The letter confirmed the administration's registration with the Service Tax Department and collection of service tax on the lease rent, deposited with the Revenue Department.

Acknowledging that the appellant had indeed paid service tax on the lease rent, the Member (Judicial) concluded that the appellant was entitled to avail cenvat credit for the tax paid on the service. Consequently, the impugned order denying cenvat credit was deemed meritless and set aside. The appeal was allowed, with any consequential relief granted as necessary. The judgment emphasized the importance of compliance with documentation requirements under the Cenvat Credit Rules, while also recognizing the appellant's entitlement to credit for legitimately paid service tax.