2024 (8) TMI 1100 - AT - Central Excise

Jurisdiction to issue SCN - authority issuing show cause notice is different from adjudicating authority - Denial of CENVAT Credit. Jurisdiction to issue SCN - appellant has alleged that show cause notice was issued by Assistant Commissioner, Circle-Jaipur B, CGST Audit Commissionerate, Jaipur and thus, its adjudication by Deputy Commissioner, CGST, Division-G, Jaipur, i.e. adjudicating authority, is without jurisdiction - HELD THAT - The allegation challenging the jurisdiction is not sustainable. The adjudication authority despite being different from one which issued the said show cause notice is held to have the competent jurisdiction. CENVAT Credit - duty paying documents - HELD THAT - An invoice issued by the service provider is sufficient to prove the admissibility of Cenvat credit of input services. Further, reference is also made to Rule 4A of the Service Tax Rules, which provides that any person who provides taxable service, on completion of the said service, shall issue an invoice or bill not later than thirty days from the date of completion of such taxable service or receipt of payment, whichever is earlier. In the present case, apparently the invoices were issued in the name of other plants of the appellant instead of being in favour of appellant. But it is also an admitted fact that the invoices were found accounted in the books of appellant, NEI Jaipur. Revenue has produced no evidence to prove that the units whose name were mentioned on the invoices had accounted those invoices in their books of accounts. Revenue has also failed to produce any evidence to prove that the input services were received by other units of NEI that the Jaipur unit. The burden was of the Revenue/department. The deficiency noticed in the invoices is held to not be enough to deny the benefit of Cenvat credit in view of the proviso to Rule 9(2) of the Credit Rules. The invoices on record have all such details as mentioned above. Inasmuch as in the present case, the invoices with incorrect address issued by the input service providers contain all the requisite particulars as required under the proviso to Rule 9(2), therefore, Cenvat credit cannot be denied to the appellant. In fact, Rule 9(2) nowhere requires mentioning the address of service recipient. The proviso to Rule 9(2) of Credit Rules kicks in only when the conditions under Rule 4A of Service Tax Rules, 1944 read with Rule 9 of the Credit Rules, are not fulfilled entirely. Thus, denial of credit is not sustainable. Appellant has also placed on record the CA certificate issued by Ashok Kanodia Co., wherein it is certified that the Cenvat credit of Rs.12.62,017 was only availed by the appellant and not by any other unit of NEI. It is already held above that it is an admissible evidence. As a settled law, credit is a indefeasible and vested right, once there is no dispute on its entitlement. The impugned order is set aside - appeal allowed.

Issues Involved:
1. Jurisdiction of the adjudicating authority.
2. Admissibility of Cenvat credit on invoices with incorrect address.
3. Denial of Cenvat credit based on printouts of emails.
4. Suppression of facts and invocation of extended period of limitation.
5. Imposition of penalties and recovery of interest.

Issue-Wise Detailed Analysis:

1. Jurisdiction of the Adjudicating Authority:
The appellant contended that the adjudicating authority lacked jurisdiction because the show cause notice was issued by the Assistant Commissioner, CGST Audit, Jaipur, but adjudicated by the Deputy Commissioner, CGST Division, Jaipur. The Departmental Representative referred to Circular No. 985/09/2014-CX dated 22.09.2014, which clarified that the Executive Commissioner or subordinate officers of the Executive Commissionerate are responsible for adjudication after the issuance of a show cause notice by the Audit Commissionerate. The Tribunal held that the adjudicating authority had competent jurisdiction as per the circular, and the appellant's challenge on jurisdiction grounds was not sustainable.

2. Admissibility of Cenvat Credit on Invoices with Incorrect Address:
The appellant argued that the invoices contained all necessary details under Rule 9(1)(f) of the Credit Rules and Rule 4A(1) of the Service Tax Rules, except for the correct address. The Tribunal noted that the substantive benefit of Cenvat credit under Rule 3 of the Cenvat Credit Rules, 2004 (CCR, 2004) cannot be denied due to procedural lapses. The invoices were accounted for in the appellant's books, and the Chartered Accountant's certificate confirmed that no other units availed credit based on those invoices. The Tribunal held that the deficiency in the invoices was not sufficient to deny the benefit of Cenvat credit, as the invoices were found to be genuine and accounted for in the appellant's records.

3. Denial of Cenvat Credit Based on Printouts of Emails:
The appellant submitted that the denial of Cenvat credit of Rs. 72,769/- based on printouts of emails was incorrect. The documents considered by the department were internal communication letters, and the actual invoices were validly issued by RITES Ltd. The Tribunal found that the appellant correctly availed credit based on valid documents and that the denial was unsustainable.

4. Suppression of Facts and Invocation of Extended Period of Limitation:
The department alleged that the appellant suppressed facts with the intent to evade payment of Central Excise duty, invoking the extended period of limitation. The Tribunal observed that the discrepancies were noticed during the audit, and there was no evidence of suppression of facts by the appellant. The Tribunal held that the extended period of limitation was not invokable, and the demand for central excise duty of Rs. 1,34,261/- was unsustainable.

5. Imposition of Penalties and Recovery of Interest:
The appellant argued that penalties were not imposable, and interest was not recoverable due to the procedural nature of the lapses. The Tribunal noted that the appellant had taken corrective measures by requesting vendors to issue corrected invoices and provided a CA certificate confirming that the credit was availed only by the appellant. The Tribunal held that the denial of credit and imposition of penalties were not justified, as the procedural lapses did not warrant such actions.

Conclusion:
The Tribunal set aside the order under challenge, allowed the appeal, and granted consequential benefits to the appellant, emphasizing that procedural lapses should not deny substantial benefits and that the burden of proof regarding the admissibility of Cenvat credit lies with the department.

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