2024 (12) TMI 1027 - AT - Service Tax

Recovery of CENVAT Credit with interest and penalty - invoices which were showing billing address of Ahmedabad Office though POs clearly mentioned the services were used by the Appellant - rent paid for unregistered premises - Xerox copy of invoices and similar documents termed as improper documents - credit availed on debit notes/demand notes/credit notes. CENVAT Credit disputed on invoices, which were showing billing address of Ahmedabad Office though POs clearly mentioned the services were used by the Appellant - HELD THAT - Issue decided in the case of Mportal India Wireless Solutions Pvt Ltd 2011 (9) TMI 450 - KARNATAKA HIGH COURT where it was held that ' Registration not compulsory for refund.' CENVAT Credit availed for the rent paid for unregistered premises - HELD THAT - Reliance placed in CCE ST NOIDA VERSUS SAMSUNG INDIA ELECTRONIC PVT. LTD. 2015 (11) TMI 1570 - CESTAT ALLAHABAD where it was held that 'the premises are not covered in the listed premises in their Centralised R.C. Thus, this premises cannot be said to be used for providing output service.' CENVAT Credit taken on Xerox copy of invoices and similar documents termed as improper documents - HELD THAT - Reliance placed in UNION OF INDIA VERSUS HIRA STEELS LTD 2010 (9) TMI 867 - CHHATTISGARH HIGH COURT where it was held that 'invoices were duly verified by Range Superintendent after getting satisfied from the concerned, departments has allowed Modvat credit, for the purpose of deciding the disputed question of fact, the Tribunal is the final authority, no substance in this appeal.' CENVAT Credit availed on debit notes/demand notes/credit notes - HELD THAT - Reliance placed in the case of appellant s Mumbai unit, where Commissioner has dropped the demand - demand set aside. Thus, these issues has been decided in favour of the appellant, there are no merits in the impugned order to the extent of denying the credit on these accounts - appeal disposed off.

Issues Involved:
1. Disallowance of CENVAT credit wrongly availed.
2. Imposition of penalties for availing CENVAT credit by suppression of facts.
3. Validity of documents used for availing CENVAT credit.
4. Reversal of inadmissible CENVAT credit by the appellant.

Detailed Analysis:

Issue 1: Disallowance of CENVAT Credit Wrongly Availed

The primary issue in this case was the disallowance of CENVAT credit amounting to Rs. 14,98,45,423/- for the period April 2009 to March 2013 and Rs. 2,12,82,576/- for the period April 2013 to March 2014. The appellant had availed CENVAT credit on various grounds, including services utilized at unregistered premises, rent paid for unregistered premises, health checkup of new recruits, Xerox copies of invoices, improper documents, club membership, and others. The tribunal examined these grounds and found that the issue was not res-integra, citing previous decisions where similar credits were allowed. The tribunal concluded that the impugned order lacked merit in denying the credit on these accounts.

Issue 2: Imposition of Penalties for Availing CENVAT Credit by Suppression of Facts

Penalties were imposed equal to 100% of the CENVAT credit wrongly availed for the period April 2009 to March 2013 and 10% for the period April 2013 to March 2014. The penalties were based on the premise that the appellant availed CENVAT credit by suppressing facts and contravening provisions with the intent to evade payment of service tax. However, the tribunal, following precedents, found no merit in the imposition of penalties as the demands themselves were not sustainable on the merits of the case.

Issue 3: Validity of Documents Used for Availing CENVAT Credit

The tribunal addressed the validity of documents such as debit notes, Xerox copies of invoices, and other similar documents used for availing CENVAT credit. It was noted that Rule 9 of the CENVAT Credit Rules, 2004, allows credit on specified documents, and if such documents contain the necessary details and the services or goods are received and accounted for, credit should not be denied. The tribunal referenced several judgments that supported the acceptance of debit notes and similar documents as valid for availing CENVAT credit, provided they contain requisite information.

Issue 4: Reversal of Inadmissible CENVAT Credit by the Appellant

The appellant reversed certain credits availed on health check-up services and club membership services, amounting to Rs. 1700 and Rs. 78,000 (with interest of Rs. 68,659) respectively, despite their belief that these credits were admissible. The tribunal confirmed the demand for these amounts but set aside the rest of the demands, as they were not found to have merit based on the case's merits.

Conclusion:

The appeal was allowed by the tribunal, setting aside the demands and penalties imposed under Section 76 and 78, except for the amounts reversed by the appellant. The tribunal did not delve into the issue of limitation, given the decision on the merits of the case. The order was pronounced in open court on December 17, 2024.

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