2019 (2) TMI 1028 - AT - Central Excise

CENVAT Credit - service tax paid by the service provider - duty paying documents - Supplementary invoices issued - Held that - A similar issue has come up before the Tribunal in the case of M/s. Diamond Cements -Vs-Commissioner of Central Excise, Bhopal 2016 (11) TMI 859 - CESTAT NEW DELHI , where it was held that it is not correct to deny the service tax credit on the basis of the above mentioned supplementary invoices, just because at the time of receipt of the input services, the input service providers were not registered and had not mentioned Service tax registration no. in the invoices - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Entitlement to avail CENVAT credit based on supplementary invoices.
2. Validity of supplementary invoices under Rule 9(1)(f) of the CENVAT Credit Rules, 2004.
3. Registration status of the service provider at the time of issuing original and supplementary invoices.
4. Compliance with Rule 4A of the Service Tax Rules, 1994.

Detailed Analysis:

1. Entitlement to Avail CENVAT Credit Based on Supplementary Invoices:
The appellant availed CENVAT credit based on supplementary invoices issued by the service provider, M/s. Suraj Associates Pvt. Ltd., JSR, after the latter realized their service tax liability. The service provider paid the service tax for the period from 16.6.2005 to 31.3.2007 and issued supplementary bills on 30.4.2007, detailing the original invoices and the corresponding service tax amounts. The Department contended that the appellant was not entitled to avail the CENVAT credit on these supplementary invoices. However, the Tribunal found that since the service tax was paid by the service provider and supplementary invoices were issued, the appellant was entitled to the CENVAT credit.

2. Validity of Supplementary Invoices Under Rule 9(1)(f) of the CENVAT Credit Rules, 2004:
The Department argued that supplementary invoices are not prescribed documents under Rule 9(1)(f) of the CENVAT Credit Rules, 2004, and hence, any credit availed on such documents should be disallowed. The Tribunal, however, referred to case laws where supplementary invoices were accepted as valid documents for availing CENVAT credit. The Tribunal cited the case of Diamond Cements vs. Commissioner of Central Excise, Bhopal, where it was held that supplementary invoices issued after payment of service tax are valid for availing CENVAT credit.

3. Registration Status of the Service Provider:
The service provider was not registered with the jurisdictional Central Excise Authority at the time of issuing the original invoices or the supplementary invoices. The challan for payment of service tax indicated "applied for" (A/F) under the registration number column. The appellant argued that the service provider applied for registration soon after becoming aware of the service tax liability, and the registration number was issued on 01.05.2007. The Tribunal found that the lack of registration at the time of issuing the original invoices did not invalidate the supplementary invoices for CENVAT credit purposes, as supported by the case law of Secure Meters Ltd. vs. CCE.

4. Compliance with Rule 4A of the Service Tax Rules, 1994:
The Department also contended that the supplementary invoices were not issued within the 14-day period specified in Rule 4A of the Service Tax Rules, 1994. The Tribunal noted that the service provider issued supplementary invoices after realizing the service tax liability and paying the tax along with interest. The Tribunal referred to the Madras High Court decision in JSW Steel Ltd. vs. Commissioner of Central Excise, Salem, which held that the 14-day period is directory and not mandatory. Hence, the delay in issuing supplementary invoices did not invalidate the CENVAT credit.

Conclusion:
The Tribunal concluded that the appellant was entitled to avail the CENVAT credit on the service tax paid by the service provider through supplementary invoices. The impugned order denying the CENVAT credit was set aside, and the appeal was allowed. The Tribunal's decision was based on the principles established in previous judicial pronouncements, which recognized the validity of supplementary invoices for availing CENVAT credit, even if issued after the prescribed period or without initial registration.