2020 (2) TMI 173 - AT - Central Excise

CENVAT Credit - duty paying invoices - credit denied on the sole ground that the invoices issued by the service provider are not in the name of the appellant but in the name of the principle manufacturer - HELD THAT - The proviso to Rule 9(2) states that credit shall not to be denied on the ground of lack of documents if the particulars with respect to details of service tax payable, description of taxable service, assessable value, service tax registration number of the person issuing invoice and his address which otherwise are available on record. The provision extends power to the authorities to allow the credit in case these details are available in the documents submitted - The documents produced clarifies that all the requisite details as mentioned in the proviso to sub rule 2 of Rule 9 ( as mentioned above ) were made available to the Department while availing the credit by the appellant. In such circumstances, the denial of credit for the sole reason that the invoices issued by the service provider were not in the name of the appellant who was the availing credit is not justifiable. Thus, it stands clarified that the other conditions for availing cenvat credit were fulfilled by the appellant who admittedly had paid the service tax. There remains no more requirement of invoice to be in his name only, Hence order under challenge is held unreasonable passed ignoring the intent of Rule 9 CCR, 2004. Otherwise also, the availability of Cenvat Credit is a substantial relief. The same cannot be denied merely on the ground of procedural lapse. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of Cenvat Credit on the grounds of invoicing discrepancy
- Interpretation of Rule 9(2) of Cenvat Credit Rules 2004
- Adjudication of appellant's entitlement to claim Cenvat Credit

Analysis:

The case involves the appellant engaged in the manufacture of pure lead and lead alloys, purchasing inputs on high seas import basis through different importers. The Department alleged that the appellant availed Cenvat Credit amounting to ?2,11,398/- without availing or paying for certain cargo handling services. A show cause notice was issued proposing the reversal of the Cenvat Credit, which was confirmed in subsequent orders. The appellant appealed against this decision.

During the proceedings, the appellant argued that they were entitled to claim the credit as they had paid the service tax, even though the invoices were in the name of the principle importer. The Department contended that the appellant was not entitled to credit based on the invoicing discrepancy. The Commissioner (A) opined that the appellant was not entitled to credit even if they had made the payment on behalf of the original importer.

The Tribunal analyzed Rule 9(2) of the Cenvat Credit Rules 2004, emphasizing that credit can be availed if the necessary particulars are contained in the documents submitted. The appellant had provided various documents, including invoices, demand drafts, agreements, and certificates, fulfilling the requirements of Rule 9(2). The Tribunal referred to precedents where credit should not be denied if all particulars are available.

Ultimately, the Tribunal held that the denial of credit solely based on the invoices not being in the appellant's name was unjustifiable. The appellant had fulfilled all conditions for availing Cenvat Credit and had paid the service tax, which was evident from the documents submitted. The Tribunal set aside the order under challenge, emphasizing that procedural lapses should not result in the denial of a substantial relief like Cenvat Credit. The Department's observation of non-payment by the appellant was deemed incorrect, and the appeal was allowed in favor of the appellant.

In conclusion, the Tribunal's decision highlighted the importance of complying with Rule 9(2) of the Cenvat Credit Rules 2004 and ensuring that all necessary particulars are provided when claiming Cenvat Credit. The judgment emphasized that procedural discrepancies should not lead to the denial of legitimate credits and that the intent of the rules should be upheld while adjudicating on such matters.