2013 (11) TMI 949 - AT - Service Tax

Validity of Debit Notes - Availment of cenvat credit Waiver of Pre-deposit - Whether the debit notes issued by the service providers are valid documents for availment of cenvat credit by the appellant Held that - The documents title debit notes/invoice and the same mentioned service tax registration number of the service provider, mentioned the nature of the service as Business Auxiliary Service and also the details of value of the taxable service and service tax paid - all the information which is required to be mentioned in invoice issued by the service provider is available in the documents and just because before the word invoice, the word debit note has been added, these documents would not cease to be a valid document for the purpose of cenvat credit - Prima facie the appellant have strong prima facie case in their favour - The requirement of pre-deposit of cenvat credit demand, interest and penalty waived till the disposal Stay granted.

Summary

Issues: Validity of debit notes for availing Cenvat credit under Rule 9 of the Cenvat Credit Rules.

Analysis:
The dispute in this appeal revolves around the validity of debit notes issued by service providers as documents for availing Cenvat credit by the appellant. The appellant received Business Auxiliary Services from a commission agent, who issued debit notes/invoices detailing sales orders, commission charged, service tax paid, and service tax registration number. The department contended that debit notes are not valid documents for Cenvat credit under Rule 9 of the Cenvat Credit Rules, leading to a show cause notice denying the credit. The Asstt. Commissioner confirmed a demand along with interest and penalty, which was partially upheld by the Commissioner (Appeals). The appellant, dissatisfied with the order, filed an appeal challenging the decision.

During the hearing of the stay application, the appellant's counsel argued that the debit notes/invoices contain all necessary information required for availing Cenvat credit, including the service tax registration number, nature of service, value of service, and taxes paid. The appellant asserted a strong prima facie case, urging the waiver of pre-deposit of the demand, interest, and penalty for the appeal's hearing, requesting a stay on recovery until the appeal's disposal. On the other hand, the Departmental Representative opposed the stay application, reiterating the findings of the Commissioner (Appeals).

Upon evaluating the submissions and examining sample documents, the judge observed that the debit notes/invoices fulfilled the requirements of a valid invoice issued by a service provider, containing essential details for Cenvat credit. The addition of the term "debit note" did not invalidate these documents for credit purposes. Consequently, the judge held that the appellant had a strong prima facie case in their favor. The judge granted the waiver of pre-deposit for the demand, interest, and penalty, allowing a stay on recovery until the appeal's final disposal. The stay application was thus approved, providing temporary relief to the appellant pending the appeal's outcome.