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2023 (10) TMI 1168 - AT - Service TaxCENVAT Credit - Service or Repair of Motor Vehicles carried out by Authorized Service Station (ASS) of motor vehicle manufacturers - service provided by the Salvager under Port services for refloating a grounded dredger - denial of credit on the ground that the invoices are raised where the name of the owner of the vehicle is mentioned and not that of the assessee. HELD THAT - The very same issue was considered by the Tribunal in the assessee s own case M/S. UNITED INDIA INSURANCE CO. LTD. VERSUS CCE ST, LTU, CHENNAI 2018 (6) TMI 200 - CESTAT CHENNAI where the Tribunal held that not having the invoice in favour of the appellant should be considered only as a procedural infraction and should not be used to deny the credit which otherwise they are eligible. After appreciating the facts and noting that the Commissioner (Appeals) has allowed the credit after which the refund has been sanctioned to the appellant, it is opined that the denial of credit is without any legal or factual basis. The impugned order set aside - The appeal filed by the assessee is allowed.
Issues Involved:
1. Disallowance of CENVAT Credit 2. Refund Claim 3. Show Cause Notice and Subsequent Appeals Summary: Disallowance of CENVAT Credit: The core issue pertains to the disallowance of CENVAT credit by the Department. The assessee, engaged in General Insurance business, could not finalize their tax liability on time due to delayed data from branches and requested provisional assessment for 2009-2010, which was granted. During the finalization, the adjudicating authority disallowed CENVAT credit of Service Tax paid under 'Service or Repair of Motor Vehicles' and services provided by Salvager under Port services. The reason cited was that invoices mentioned the clients' names (vehicle owners, ship dredger owners) instead of the assessee's name. The Commissioner (Appeals) later allowed the credit, which led to the assessee filing a refund claim. Refund Claim: Following the Commissioner (Appeals) decision, the assessee filed a refund claim of Rs.1,96,75,899/-. The Department, however, reviewed the order and filed an appeal against it. Despite this, the refund sanctioning authority sanctioned the refund, and the assessee received the cheque. Subsequently, the Department issued a Show Cause Notice proposing to disallow the refunded credit. Show Cause Notice and Subsequent Appeals: The assessee responded to the Show Cause Notice, arguing that post-amendment in Section 84, a Show Cause Notice against the refund order was unsustainable and that an appeal should have been filed instead. The Department did file an appeal against the refund order, which led to the Commissioner (Appeals) rejecting the refund claim and allowing the Department's appeal. The assessee then filed an appeal against this decision. Tribunal's Decision: The Tribunal examined the sequence of transactions and the nature of the services provided. It noted that the insurance policy is taken by the customer, and the obligation to settle claims lies with the assessee. The invoices, though in the customer's name, are part of the process where the assessee ultimately bears the cost. The Tribunal referenced its previous decision in the assessee's own case, which supported the admissibility of CENVAT credit for input services used in providing output services. The Tribunal concluded that the denial of credit by the Department was without legal or factual basis, considering it a procedural infraction that should not deny the credit. It set aside the impugned Order-in-Appeal No. 60/2014, sustained Order-in-Appeal No. 78/2012, allowed the assessee's appeal, and dismissed the Department's appeal. Conclusion: The Tribunal ruled in favor of the assessee, allowing the CENVAT credit and the refund claim, and dismissed the Department's appeal. The judgment emphasized that procedural issues should not override substantive entitlements to credit.
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