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2022 (4) TMI 1156 - AT - Service TaxCENVAT Credit - duty paying invoices - performa invoices - Invoices issued in the name of Head Office instead of factory unit - Invoices issued by Rampal Sahu in contravention of Rule 9(1) of the Cenvat Credit Rules, 2004 - Excess availment of Cenvat Credit on the invoice issued by Sandvik Asia - Rule 9 of CCR - extended period of limitation - penalty. CENVAT Credit - performa invoices - HELD THAT - The manufacturer or producer of final product or the provider of output service is eligible to take CENVAT Credit of the duty/ tax paid by him in terms of Rule 3 of Cenvat Credit Rules, 2004. Rule 9 thereof requires certain documents and accounts to be the basis for taking the Cenvat Credit. The said Rule of 9 of Cenvat Credit Rules, 2004 clarifies that Cenvat Credit on the documents as mentioned in Sub Rule (1) of Rule (9) shall be available if and only if all the particulars as prescribed under the respective statute are contained in the said documents - the documents required under the Rule 9 are not confined to merely invoices but these may be any documents, like bill or challan as issued in terms of Rule 4 (2) A of the Service Tax Rules etc. This particular Rule specifies the amount of information as is required in a particular documents for availment of Cenvat Credit. Thus any documents as required under Rule 4(2)A can be the documents under Rule 9 of Cenvat Credit Rules for entitlement of availing Cenvat Credit - it is held that denial of availment of Cenvat Credit on performa invoices was absolutely wrong. CENVAT Credit - Invoices issued in the name of Head Office instead of factory unit - HELD THAT - The availment of income tax credit is the creature of statute and the amounts to a substantial benefit which can not be denied based upon the some procedural irregularity - Hon ble High Court of Punjab and Haryana in the case of COMMISSIONER OF CENTRAL EXCISE, CHD. VERSUS M/S STELKO STRIPS LTD. AND OTHERSS 2010 (3) TMI 68 - PUNJAB HARYANA HIGH COURT while relying upon the earlier decision in the case of COMMISSIONER OF CENTRAL EXCISE, LUDHIANA VERSUS RALSON INDIA LTD. 2005 (12) TMI 37 - PUNJAB HARYANA HIGH COURT - The COMMISSIONER OF C. EX., DELHI-III, GURGAON VERSUS MYRON ELECTRICALS PVT. LTD. 2006 (11) TMI 134 - HIGH COURT OF PUNJAB AND HARYANA has held that the credit cannot be denied on the ground that the documents did not contain all the particulars. It was clarified that once difference was disputed and it was found that documents were genuine and not fraudulent then the manufacturer would be entitled to take Cenvat Credit on duty paid invoices. Issuance of invoices in the name of head office is merely procedural compliance - Credit allowed. CENVAT Credit - Invoices issued by Rampal Sahu in contravention of Rule 9(1) of the Cenvat Credit Rules, 2004 - HELD THAT - The appellant has mentioned that there had occurred the typographical error on the invoice in question, that too only of one letter i.e. S instead of H (PAN No. of Rampal Sahu BYYPS 8713 H). Copy of PAN is placed on record by the adjudicating authority. Accordingly, non consideration of the said submission despite the documents being on record is held to be highly irrational and unjustified on the part of the adjudicating authority. It is held that the credit on this ground has also wrongly been denied - credit cannot be denied. Excess availment of Cenvat Credit on the invoice issued by Sandvik Asia - HELD THAT - It is clear that a substantial benefit of credit on the admittedly paid duty / tax has been denied by the Adjudicating Authority below on irrational and illogical ground despite having sufficient and relevant documents reflecting entitlement of the appellant to the said benefits. It is held that even on this ground the credit has wrongly been denied. Extended period of limitation - Penalty - HELD THAT - It becomes clear that the appellant was entitled for claiming the income tax credit and the credit proposes to have been recovered vide the impugned show cause notice is held to have been rightly availed by the appellant. The appellant had disclosed the total credit of amount availed by them in its ER I returns. There is no denial of the said fact also. No malafide intention or alleged suppression is at all apparent on part of the appellant. It is accordingly held that extended period of limitation in terms of proviso to 73 of Finance Act has wrongly been invoked - penalty is also held to be wrongly imposed. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Availment of Cenvat Credit on proforma invoices. 2. Invoices issued in the name of the head office instead of the factory unit. 3. Invoices issued by Rampal Sahu in contravention of Rule 9(1) of the Cenvat Credit Rules, 2004. 4. Excess availment of Cenvat Credit on the invoice dated 28.6.2017 issued by Sandvik Asia. 5. Invocation of the extended period of limitation. Detailed Analysis: (i) Cenvat Credit on Proforma Invoices: The Tribunal observed that Rule 3 of the Cenvat Credit Rules, 2004, allows the manufacturer or service provider to take Cenvat Credit of duty/tax paid. Rule 9 specifies that credit is available if the documents contain all prescribed particulars. The Tribunal emphasized that documents under Rule 9 are not limited to invoices but can include bills or challans per Rule 4(2)A of the Service Tax Rules. The Tribunal referenced decisions in CCE Indore vs Grasim Industries and Emmes Metals Pvt Ltd. to support the admissibility of proforma invoices if they contain the required information. Thus, the denial of Cenvat Credit on proforma invoices was deemed incorrect. (ii) Invoices Issued in the Name of Head Office Instead of Factory Unit: The Tribunal noted that Cenvat Credit is a statutory benefit that should not be denied due to procedural irregularities. Citing decisions from the High Courts of Gujarat and Punjab and Haryana, the Tribunal stated that credit cannot be denied on the basis of procedural lapses if the documents are genuine. The Tribunal held that invoices issued in the name of the head office are a procedural compliance issue, and credit based on such invoices is valid. The findings in the Order-in-Appeal on this aspect were set aside. (iii) Invoices Issued by Rampal Sahu in Contravention of Rule 9(1): The Tribunal reviewed the invoices and found that they pertained to crane hiring services, not food facility services as alleged. The Tribunal noted a typographical error in the PAN number on the invoices and found that the adjudicating authority's non-consideration of this submission was irrational. The Tribunal held that the denial of credit on this ground was unjustified. (iv) Excess Availment of Cenvat Credit on the Invoice Dated 28.6.2017 Issued by Sandvik Asia: The Tribunal examined the entries and invoices and found that there were two separate invoices with correct credit amounts. The Tribunal acknowledged a clerical mistake in reporting the bill number and date but found no excess availment of credit. The Tribunal held that the denial of credit on this ground was incorrect. (v) Invocation of the Extended Period of Limitation: The Tribunal observed that the demand was made for the period March 2016 to June 2017, with the show cause notice issued on 14.11.2019. The Tribunal found no evidence of duty/tax evasion or malafide intention by the appellant. The Tribunal cited the Supreme Court's decision in Uniworth Textiles Ltd. vs CCE, Raipur, and other cases to support that the extended period of limitation was wrongly invoked. Consequently, the penalty imposed was also deemed unjustified. Conclusion: The Tribunal set aside the order under challenge, allowing the appeal. The Tribunal found that the denial of Cenvat Credit on various grounds was incorrect and that the extended period of limitation was wrongly invoked. The appellant was entitled to the credit, and the penalty was unjustified. The appeal was allowed, and the order was pronounced in open court on 25-04-2022.
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