2020 (1) TMI 271 - AT - Service Tax

CENVAT Credit - duty paying invoices - allegation that credit availed without input service invoice and also on the basis of 69 debit notes issued by M/s. Banketch India (P) Ltd., Bangalore - Rule 9 of the CCR - HELD THAT - It has been consistently held by the Tribunal and the High Court in various decisions cited that CENVAT credit can be availed on the basis of debit notes if it contains all the details as specified under Rule 9 of the CCR and in the present case, the debit notes produced before me contains all the details which are required under Rule 9 and therefore they are valid documents for claiming CENVAT credit. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Validity of availing CENVAT credit based on debit notes
- Proper appreciation of facts and law in passing the impugned order

Analysis:

Issue 1: Validity of availing CENVAT credit based on debit notes
The appellant was registered under various categories under the Finance Act, 1994. During an audit, it was found that the appellant had availed irregular CENVAT credit of input services without proper documentation. The main contention was whether the CENVAT credit based on debit notes issued by the service provider was a valid document under Rule 9 of the CENVAT Credit Rules, 2004. The appellant argued that the proviso to Rule 9 had not been considered by the authorities and presented relevant decisions to support their claim, emphasizing that the debit notes produced contained all necessary details as required by Rule 9. The Commissioner(Appeals) had relied on a previous decision to deny the credit, which was later overturned by the High Court. The Tribunal, after reviewing the submissions and records, concluded that the debit notes provided by the appellant met the requirements of Rule 9 and were valid for claiming CENVAT credit. Consequently, the impugned order was set aside, and the appeal of the appellant was allowed.

Issue 2: Proper appreciation of facts and law in passing the impugned order
The appellant contended that the impugned order was unsustainable as it failed to properly appreciate the facts and law. The appellant's counsel argued that the authorities had ignored the debit notes and consolidated invoice provided by the appellant, leading to an incorrect denial of the CENVAT credit. The Tribunal, after hearing both sides and examining the records, agreed with the appellant's submissions. It held that the impugned order was not legally sound as it did not consider the validity of the documents provided by the appellant in accordance with Rule 9. The Tribunal's decision to set aside the impugned order and allow the appeal was based on the proper appreciation of the facts and law surrounding the availing of CENVAT credit based on debit notes.

In conclusion, the judgment by the Appellate Tribunal CESTAT Bangalore highlighted the importance of complying with Rule 9 of the CENVAT Credit Rules, 2004 when availing CENVAT credit based on debit notes. The detailed analysis of the issues involved and the relevant legal precedents cited in the judgment underscored the significance of proper documentation and adherence to legal requirements in such matters.