2019 (10) TMI 498 - AT - Service Tax

CENVAT Credit - duty paying documents - inadmissible documents - April, 2009 to September, 2010 - Rule 9 (1) and 9 (2) of Cenvat Credit Rules - Time Limitation - HELD THAT - The use of word shall in Rule 9 (1) makes the provision mandatory and it becomes clear that to avail cenvat credit mandatorily the documents as mentioned therein with such particulars as mentioned shall be furnished. In the present case no doubt the appellant has placed the invoice for availing the cenvat credit. Apparently and admittedly, the invoice is not issued in the name of the appellant, but in the name of Cameron (Score) PTE Ltd., Singapore. The person, who is named in the invoice can only avail the cenvat credit, as per the said rule. The subsequent argument on behalf of appellant that there have been the corrections in various invoices in the name of the appellant but there is no certification on record about those corrections to have been made by the service provider. Rule 9 (b) itself speaks about the supplementary invoices. The appellant could have invoked the said rule - In absence thereof the statutory mandate in rule 9 cannot be overlooked in view of the oral defences of the appellant. The fact that services have been received in India is also not coming out from all of the invoices - even the argument that the substantial benefit cannot be denied due to mere procedural lapse is not sustainable to extend any benefit to the appellant. Time Limitation - HELD THAT - No doubt the period of demand is herein is April 2009 to 2010 and show cause notice was issued in February, 2013 with a corrigendum thereof in February, 2015, but, it is clear that liability of the service recipient settled abroad has been taken over by the appellant without having invoice being generated in his favour. No authentication has been received by the appellant about relevant changes as are impressed upon to be the basis for entitling appellant to avail credit. The said act and conduct to my opinion is definitely an act which is done with an intent to cause loss to the Government Exchequer - The Department is therefore held entitled to invoke the extended period of limitation. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Availing of cenvat credit on inadmissible documents.
2. Proper documents for availing cenvat credit.
3. Applicability of circular on invoice authenticity.
4. Time limitation for the show cause notice.

Issue 1: Availing of cenvat credit on inadmissible documents:
The appellant was found to have wrongly availed cenvat credit on inadmissible documents during a specific period. The Department proposed recovery along with interest and penalty, which was confirmed in the Order-in-original. The appellant contended that the credit was correctly availed based on proper invoices, meeting the requirements of Rule 9 of the Cenvat Credit Rules. However, the tribunal found that the invoices were not issued in the appellant's name, leading to the denial of cenvat credit due to statutory mandates.

Issue 2: Proper documents for availing cenvat credit:
The tribunal analyzed Rule 9 of the Cenvat Credit Rules, which mandates specific documents for availing cenvat credit. The rule makes it mandatory to furnish documents with prescribed particulars to claim the credit. Despite the appellant's arguments that services were received in India, the invoices were not in their name, leading to the denial of credit. The tribunal emphasized the mandatory nature of the rule and the importance of invoices being issued in the name of the credit claimant.

Issue 3: Applicability of circular on invoice authenticity:
The appellant relied on a circular regarding invoice authenticity and argued that corrections were made in the invoices. However, the tribunal found no certification of these corrections by the service provider. The tribunal also noted that the circular cited by the appellant did not apply to the present case, as it dealt with incomplete invoices, whereas the invoices in question were either not in the appellant's name or were altered without authentication.

Issue 4: Time limitation for the show cause notice:
The appellant raised the argument that the show cause notice was barred by time, as it was issued after a significant period from the alleged period of demand. However, the tribunal held that the appellant's actions in taking over liability without proper invoices constituted an intentional act to cause loss to the government exchequer. This intentional conduct allowed the Department to invoke the extended period of limitation, justifying the issuance of the notice. The tribunal found no infirmity in the order under challenge and upheld the decision, dismissing the appeal.

In conclusion, the tribunal ruled against the appellant, denying the availing of cenvat credit on inadmissible documents due to non-compliance with the statutory requirements. The judgment emphasized the mandatory nature of the rules governing cenvat credit and the importance of proper documentation in claiming such credits. The tribunal also rejected the appellant's arguments regarding invoice authenticity and time limitations for the show cause notice, upholding the Department's decision.