9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (8) TMI 1316 - AT - Central ExciseDenial of CENVAT Credit - Levy of penalty on appellant - input services on the strength of supplementary invoices - interpretation of Rule 9 (1) of the CENVAT Credit Rules, 2004 - HELD THAT - Rule 9(1) of CCR provides for the documents against which the appellant could have taken the CENVAT credit. Whereas sub rule 1 (a) and (b) are with reference to the documents that are in respect of the clearance and payment of Central Excise Duty/ Countervailing duty, sub rule 1 (e), (f) and (g) prescribes the documents against which the CENVAT Credit of Service Tax could have been taken. Sub-rule 1 (b) makes the distinction between the invoices issued at the time of clearance of goods and those issued subsequently as supplementary invoices. As the manner of payment of service tax was made on the accrual basis with effect from 01.04.2011, which was akin to the what had been provided in respect of the goods, Rule 9 (1) (bb) was a natural consequence to align the CENVAT Credit Rules in respect of services and goods. It is the first time that CENVAT credit rules made distinction between the Invoice and Supplementary invoices in respect of service tax paid. Hence order of Commissioner drawing support from newly inserted rule 9 (1) (bb) to apply the Rule 9 (1) (b) for denying the credit availed by the appellant cannot cannot be sustained. There are no merits in the impugned order denying the credit on the supplementary invoices evidencing the payment of service tax for the period prior to amendments made in the CENVAT Credit Rule, 2004 by way of insertion of Rule 9 (1) (bb) with effect from 01.04.2011 - the issue of invocation of extended period of limitation not required to be taken of. The order disallowing the CENVAT Credit set aside, the order demanding the interest and for imposition of penalty will be set aside - the demands for Cenvat credit, interest and penalty is set aside. Appeal allowed.
Issues Involved:
1. Disallowance of Cenvat Credit on Supplementary Invoices. 2. Imposition of Penalty under Rule 15 of the Cenvat Credit Rules, 2004. 3. Validity of Supplementary Invoices for Availing Cenvat Credit. 4. Invocation of Extended Period of Limitation. Summary: 1. Disallowance of Cenvat Credit on Supplementary Invoices: The Commissioner disallowed the Cenvat credit of Rs 1,54,51,005.15 and Rs 87,859.69 availed by the appellant on input services on the strength of supplementary invoices under Rule 14 of CENVAT Credit Rules, 2004, read with proviso to Section 11A (1) of the Central Excise Act, 1944, along with interest under Section 11AB of the Act. The Commissioner held that supplementary invoices issued by service providers are not specified documents for availing Cenvat credit as per Rule 9 of the Cenvat Credit Rules, 2004, and this rule only recognizes supplementary invoices issued by manufacturers. 2. Imposition of Penalty under Rule 15 of the Cenvat Credit Rules, 2004: The Commissioner imposed penalties of Rs 2000 and Rs 87,859.69 under Rule 15 of the Cenvat Credit Rules, 2004, for the respective disallowed credits. The penalties were based on the finding that the appellant's conduct was not bona fide as they were presumed to be unaware of the taxability of services received, despite being a large concern dealing with Central Excise and Service Tax. 3. Validity of Supplementary Invoices for Availing Cenvat Credit: The Tribunal found that Rule 9(1)(f) of the Cenvat Credit Rules, 2004, allows for Cenvat credit on invoices issued by a provider of input service, without distinguishing between original and supplementary invoices. The Tribunal cited several precedents, including "Delphi Automotive Systems (P) Ltd." and "Secure Meters Ltd.," to support the view that supplementary invoices are valid documents for availing Cenvat credit. The Tribunal noted that the restriction on supplementary invoices issued by service providers was only introduced with effect from 01.04.2011 through Rule 9(1)(bb) and does not apply retrospectively. 4. Invocation of Extended Period of Limitation: The Tribunal did not find merit in the invocation of the extended period of limitation by the Commissioner. The Tribunal emphasized that the demand made against the appellant by invoking Rule 9(1)(b) is contrary to the scheme of Rule 9(1) and that the newly inserted Rule 9(1)(bb) cannot be applied retrospectively to deny credit for the period prior to 01.04.2011. Conclusion: The Tribunal set aside the order disallowing the Cenvat credit on supplementary invoices, along with the associated demands for interest and penalties. Consequently, the appeal filed by the appellant was allowed, and the appeal filed by the revenue was dismissed.
|
