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2024 (8) TMI 401 - AT - Service TaxDenial of CENVAT Credit - availment of CENVAT Credit irregularly without the support of valid duty-paid documents and without submitting copies of relevant invoices - extended period of limitation - interest - penalties. Credit to the tune of Rs. 16,19,472/-has been denied on the ground that the ISD cannot distribute the input or capital goods credit - HELD THAT - It is found that N/N. 10/2008- C.E.(N.T.) dated 01.03.2008 allows the transfer of credit on inputs and capital goods by an ISD with effect from 01.04.2008. Further, it is observed that there is no suppression of fact with intention to evade payment of tax established in this case. Accordingly, denial of credit availed by invoking extended period of limitation is not sustainable. Distribution of credit of capital goods, inputs and input services are allowed within the normal period of limitation vide N/N. 10/2008. CE (NT). Thus, the CENVAT Credit denied to the appellant on this count in the impugned order is not sustainable. Denial of credit to the tune of Rs.7,18,797/- - credit disallowed on the ground that no documents were submitted by the appellant for availment of this credit - HELD THAT - It is observed that there is no dispute with regard to receipt and utilization of credit for the purpose of the taxable services rendered by them. It is found that the credit availed by the appellant pertains to the period 2006-07 and the Notice has been issued for disallowance of the credit in the year 2011, which is clearly beyond the normal period of limitation. The suppression of facts with intention to evade payment of duty has not been established in this case. Accordingly, the disallowance of credit beyond the normal period by invoking the extended period of limitation in this regard is not sustainable. Credit to the tune of Rs.4,45,016/- been denied on the basis that the documents issued by M/s. Exide are not in conformity with Rule 9 of the CENVAT Credit Rules, 2004 - HELD THAT - The credit availed by the appellant pertains to the year 2009 (two Bills both dated 31.05.2009). However, the Notice has been issued beyond the normal period of limitation. Accordingly, the denial of credit by invoking the extended period of limitation in this regard is not sustainable. Therefore, the credit availed by the appellant amounting to Rs.4,45,016/- by the appellant on the strength of the bills issued by M/s. Exide cannot be denied. Denial of credit of Rs.17,174/- by invoking extended period of limitation - HELD THAT - It is observed that the said input service credit pertains to the period from May 2010 to September 2010 and also during March 2009, which has been disallowed by invoking the extended period of limitation by way of the impugned Show Cause Notice issued on 11.11.2011. As the Notice was issued beyond the normal period of limitation, the denial of credit in this regard by invoking the extended period of limitation is not sustainable. Disallowance of Cenvat credit of Rs.21,68,423/- - Rent-a-cab operator service - Revenue alleges that the said bills raised by these service providers do not bear mandatory details as required to be mentioned under the provisions of Rule 9(2) of CENVAT Credit Rules, 2004 read with Rule 4A (1) of the Service Tax Rules, 1994 - HELD THAT - It is found that the documents based on which credit has been availed by the appellant contains all the requisite details as mandated under Rule 9(2) of CENVAT Credit Rules, 2004 read with Rule 4A (1) of the Service Tax Rules, 1994.Thus, the invoices and bills based on which credit has been availed by the appellant are valid documents. Accordingly, the credit cannot be denied on account of procedural infirmities as alleged by the Revenue in the impugned order. The denial of credit of Rs.21,68,423/- is therefore not sustainable and hence, the disallowance of credit on this count is set aside in the impugned order. Interest and penalties - HELD THAT - Since the entire credit availed by the appellant is held to be eligible, the question of demanding interest and imposing penalties on account of irregular availment of credit does not arise. The impugned order is set aside - appeal allowed.
Issues:
1. Denial of CENVAT Credit of Rs.28,00,459/- 2. Denial of CENVAT Credit of Rs.21,68,423/- Analysis: Issue 1: Denial of CENVAT Credit of Rs.28,00,459/- The appellant contested the denial of credit on various grounds. Firstly, regarding the denial of Rs.16,19,472/-, the appellant argued that the ISD can distribute credit on inputs and capital goods as per Notification No. 10/2008-C.E.(N.T.) dated 01.03.2008, thus challenging the disallowance. It was emphasized that there was no intention to evade duty, and hence, the extended period of limitation should not be invoked. The Tribunal agreed, holding that the denial of credit was not sustainable. Secondly, for the disallowed amount of Rs.7,18,797/-, the Tribunal noted calculation errors and the absence of supporting documents. It was highlighted that the Notice for disallowance was issued beyond the normal limitation period, and suppression of facts was not proven, leading to the conclusion that the denial of credit was not justified. The Tribunal also addressed the denial of Rs.4,45,016/- and Rs.17,174/-, concluding that the denial based on procedural grounds and extended limitation period was not sustainable. Consequently, the Tribunal set aside the disallowance of the entire Rs.28,00,459/- CENVAT Credit. Issue 2: Denial of CENVAT Credit of Rs.21,68,423/- Regarding the denial of credit amounting to Rs.21,68,423/-, related to the 'Rent-a-Cab' services, the appellant argued that the bills contained all mandatory details as required by the rules. The Tribunal concurred, stating that the invoices had the necessary particulars, making the denial of credit on procedural grounds unjustified. As a result, the disallowance of the Rs.21,68,423/- CENVAT Credit was set aside. Since all credits were deemed eligible, the Tribunal ruled out the imposition of interest and penalties for irregular credit utilization. Consequently, the impugned order was set aside, and the appeal filed by the appellant was allowed. This comprehensive analysis of the issues involved in the judgment highlights the arguments presented by the appellant, the Tribunal's considerations, and the final decision reached in each instance.
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