2013 (10) TMI 1009 - AT - Service Tax

Cenvat Credit - Duty paying documents - Invoices for input services - Commercial or industrial construction service - Held that - invoices were issued by M/s. Jaichitra & Co., the unit is no longer in existence. Further, in respect of invoices issued by M/s. Penguin Diesel and M/s. Navie teknokem which do not contain registration number. I find that the documents furnished by the applicant do not contain the details as required under Rule 4A of Service Tax Rules. It is noted that some of the invoices issued were prior to registration. It appears that they have availed credit on the basis of documents which are disputed in the present appeal. Hence the applicant failed to make out prima facie case for waiver of pre-deposit of entire amount of tax and penalty along with interest - stay granted partly.

Summary

Issues: Application for waiver of pre-deposit of tax, availing cenvat credit based on incomplete documents, failure to make out prima facie case for waiver.

The judgment pertains to an application for waiver of pre-deposit of tax amounting to Rs.4,33,082/- along with interest and penalty by an applicant engaged in providing commercial or industrial construction service. The audit revealed that the applicant had availed cenvat credit during 2004-05 based on documents lacking essential details such as the serial number or registration number of the service provider. Specifically, out of the 19 invoices submitted, 7 belonged to a company registered after the issuance of the invoices, while 5 invoices were from a company no longer in existence. Additionally, invoices from other companies did not contain registration numbers as required by Rule 4A of Service Tax Rules. The Tribunal found that the applicant failed to establish a prima facie case for the waiver of the entire pre-deposit amount due to discrepancies in the documents used to claim credit. Consequently, the applicant was directed to deposit Rs.1,00,000/- within 6 weeks, with the remaining tax, interest, and penalty being waived and its recovery stayed during the appeal process.

In this case, the issue revolved around the applicant's eligibility for the waiver of pre-deposit of tax, interest, and penalty. The Tribunal noted that the applicant had availed cenvat credit based on incomplete and disputed documents, which did not meet the requirements stipulated under the Service Tax Rules. The Tribunal emphasized the importance of adhering to the prescribed documentation standards, particularly the inclusion of essential details like registration numbers. By failing to provide adequate documentation to support the credit availed, the applicant could not establish a strong case for the complete waiver of the pre-deposit amount. Consequently, the Tribunal ordered a partial deposit and granted a waiver for the remaining amount, subject to compliance within the specified timeline.

The judgment underscores the significance of maintaining accurate and complete documentation when claiming tax credits in the context of commercial or industrial construction services. The Tribunal scrutinized the invoices submitted by the applicant and identified several discrepancies, including invoices from companies without valid registration numbers and those issued prior to the service providers' registration dates. Such inconsistencies raised doubts about the legitimacy of the cenvat credit claimed by the applicant. The Tribunal's decision to require a partial deposit and grant a waiver only after the deposit reflects the need for taxpayers to substantiate their claims with proper documentation to avoid potential penalties and ensure compliance with tax regulations.