2025 (1) TMI 1086 - AT - Central Excise

Recovery of Cenvat credit availed on the basis of invalid and improper documents - credit availed on the basis of invoices issued by bank branches and photocopies of invoices - denial of Cenvat Credit on the basis of carbon copy/ extra copy of invoices - invocation of extended period of limitation. Credit availed on the basis of invoices issued by bank branches and photocopies of invoices - HELD THAT - The head office of M/s Indian bank at Chennai is centrally registered with the service tax department for banking and Financial Services and were complying with the prescribed statutory formalities. As the Appellants submitted the Certificates/Statements of Service Tax collected issued by M/s Indian Bank from its Branches at Coimbatore and Mecheri referring to Centralized Accounting System at their Head Office which contain all the relevant particualrs required in terms of the proviso to Rule 4A of the Service Tax Rules which are valid documents in terms of Rule 9(1) (f) of the Cenvat Credit Rules 2004 for availing Cenvat credit. it is opined that the denial of Cenvat Credit is not justified more particularly when the impugned order had completely ignored provisions of Rule 4A of the Service Tax Rules and the Proviso to Rule 9(2) of the CENVAT Credit Rules 2004. Availment of Cenvat Credit on the strength of xerox copy of invoice - HELD THAT - In similar circumstances various courts/ Tribunals have decided the issue in favour of the Appellants and allowed Cenvat Credit - In the case of SHIVAM ELECTRICAL INDUSTRIES VERSUS UNION OF INDIA 2018 (2) TMI 816 - JAMMU AND KASHMIR HIGH COURT it was held that The aforesaid Rule (Rule 9 of CCR) in our considered opinion nowhere provides that Cenvat credit cannot be availed on the basis of photocopy of the documents especially when the respondents have not disputed the correctness of the contents of the photocopies of the invoices produced by the petitioner. From the perusal of the certificate issued by the Superintendent Customs and Central Excise Range-III Division-I Ghaziabad it is evident that the excise duty has been duly paid by the petitioner . Conclusion - The documents issued by banking companies containing requisite particulars are valid for availing Cenvat Credit. The Appellant is entitled to avail the Cenvat Credit based on Certificates/ statements issued by M/s. Indian Bank and based on the photocopies of invoices in the facts of this appeal. Appeal allowed.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the Appellant is eligible to avail Cenvat Credit on the basis of invoices issued by bank branches and photocopies of invoices.
Whether the invocation of the extended period for recovery of Cenvat Credit is justified under the circumstances of the case.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Eligibility to Avail Cenvat Credit on Bank Branch Invoices and Photocopies

Relevant Legal Framework and Precedents: The case revolves around Rule 4A of the Service Tax Rules, 1994, and Rule 9 of the Cenvat Credit Rules, 2004. The Appellant relied on several precedents, including Soham Motors Pvt. Ltd. Vs. CCE and MPI Machine Limited Vs. CCE, which supported the validity of documents issued by banking companies for availing Cenvat Credit.
Court's Interpretation and Reasoning: The Tribunal interpreted that the documents provided by the Appellant, including certificates from Indian Bank, contained all necessary particulars as required under the rules. The Tribunal emphasized that the denial of credit was unjustified, particularly when the documents complied with the proviso to Rule 4A and Rule 9(1)(f).
Key Evidence and Findings: The Appellant provided certificates from Indian Bank branches, which included details such as the transaction description, service tax amount, and the service provider's registration number. The Tribunal found these documents to be sufficient for availing Cenvat Credit.
Application of Law to Facts: The Tribunal applied the legal provisions and precedents to conclude that the Appellant's documents were valid for Cenvat Credit. It noted that the bank was centrally registered and complied with statutory requirements.
Treatment of Competing Arguments: The Department argued that the documents were invalid, but the Tribunal found no basis for this claim, especially given the precedents supporting the Appellant's position.
Conclusions: The Tribunal concluded that the Appellant was entitled to avail Cenvat Credit based on the documents provided and set aside the impugned order.

Issue 2: Justification for Invocation of Extended Period

Relevant Legal Framework and Precedents: The extended period of limitation is addressed under Section 11A of the Central Excise Act, 1944. The Appellant cited cases like Pushpam Pharmaceuticals Company Vs. CCE to argue against the invocation of the extended period.
Court's Interpretation and Reasoning: The Tribunal reasoned that there was no suppression of facts by the Appellant, as the transactions were disclosed in ER 1 returns and audited by the Department.
Key Evidence and Findings: The Tribunal noted that the Appellant maintained proper records and there was no evidence of intent to evade duty.
Application of Law to Facts: The Tribunal applied the legal standards for invoking the extended period and found them unmet, as the Department was aware of the facts through regular audits.
Treatment of Competing Arguments: The Department's argument for invoking the extended period was dismissed due to a lack of evidence of suppression or intent to evade duty.
Conclusions: The Tribunal concluded that the invocation of the extended period was unjustified, and the penalty imposed was not sustainable.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "The denial of Cenvat Credit is not justified, more particularly when the impugned order had completely ignored provisions of Rule 4A of the Service Tax Rules and the Proviso to Rule 9(2) of the CENVAT Credit Rules, 2004."
Core Principles Established: The judgment reinforces that documents issued by banking companies containing requisite particulars are valid for availing Cenvat Credit. It also establishes that the extended period cannot be invoked without evidence of suppression or intent to evade duty.
Final Determinations on Each Issue: The Tribunal set aside the impugned order, allowing the Appellant to avail Cenvat Credit based on the provided documents and ruled that the invocation of the extended period and imposition of penalty were unwarranted.

In conclusion, the Tribunal's decision underscores the importance of adhering to the statutory provisions and precedents in assessing the validity of documents for Cenvat Credit and the conditions for invoking the extended period for recovery. The judgment favored the Appellant, granting them the relief sought.

← Previous Next →