2021 (12) TMI 847 - AT - Service Tax

CENVAT Credit - input service - capital goods - motor vehicles - proper documents in terms of Rule 9 of Cenvat Credit Rules - period 2011-12 and 2012-13 - HELD THAT - Admittedly M/s Shivam Motors is a Authorised dealer of M/s Tata Motors Limited and thus a representative of the manufacturer of the motor vehicle. Admittedly, the appellant have produced the invoices of the dealer alongwith invoice-cum-challan issued by M/s Tata Motors Limited, when they initially cleared the goods to their specific counterpart mentioning on the invoice internal customer - the details of excise duty and cess as per the invoice of M/s Shivam Motors is not in dispute, as have been taken notice of in para 2.1 of the show cause notice and also in para 2.2 of the order-in-original. There is an error on the part of Revenue in appreciating the documents, where a provider of service has received the capital goods manufactured by M/s Tata Motors Limited through its authorised dealer - the show cause notice is mis-conceived and no case of wrong cenvat credit taken as alleged, is made. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availing of cenvat credit on capital goods without proper documentation
- Disallowance of cenvat credit by Revenue
- Reduction of penalty by Commissioner (Appeals)
- Challenge of the decision before the Tribunal

Analysis:
1. The appellant, a service provider under 'Cargo Handling Service,' availed cenvat credit on input service and capital goods. The Revenue found discrepancies in the availed credit during the audit for the period 2010-11 to 2014-15, specifically related to capital goods purchased from M/s Shivam Motors Pvt. Limited. The appellant failed to produce some invoices, and discrepancies were noted in the documentation, leading to a show cause notice proposing disallowance of cenvat credit amounting to ?23,36,042.

2. The show cause notice alleged that the appellant did not receive cenvat credit on the vehicles or capital goods from the manufacturer or registered dealer, as the manufacturer's invoices did not mention the appellant as the consignee. The documents were deemed improper under Rule 9 of Cenvat Credit Rules. The Adjudicating Authority confirmed the demand and imposed penalties and interest.

3. The Commissioner (Appeals) acknowledged that the appellant availed cenvat credit based on invoices from M/s Shivam Motors, the registered dealer of M/s Tata Motors Limited. However, critical information like ECC No., Central Excise duty details, and vehicle names were missing from these invoices. The Commissioner upheld the disallowance but reduced the penalty to 50%, leading the appellant to appeal before the Tribunal.

4. Upon review, the Tribunal noted that M/s Shivam Motors was an authorized dealer of M/s Tata Motors Limited, acting as a representative of the manufacturer. The Tribunal found errors in Revenue's appreciation of documents, emphasizing that the appellant received capital goods through the authorized dealer. The Tribunal concluded that the show cause notice was misconceived, and there was no evidence of wrongly availed cenvat credit.

5. Consequently, the Tribunal set aside the impugned order, allowing the appeal with consequential benefits. The decision was made based on the understanding that the appellant received the capital goods from the manufacturer through the authorized dealer, and the show cause notice lacked merit in alleging incorrect cenvat credit utilization.