2013 (12) TMI 98 - AT - Service Tax

Input credit - Assessee contends that invoices showing payment of service tax either in the name of head office or in the name of factory should be considered for grant of input credit - Public interest or private interest - Whether matter should go back for examining the issue - Held that - exemption cannot be granted as public revenue is sacrificed by grant of exemption. Revenue owes a duty to ask about eligibility and manner of claim as well as admissibility thereof and Assessee has burden to proof its claim. Legislature have thoughtfully designed the manner how claim should be made for which they have laid down the procedure under Rule 9 of the Cenvat Credit Rules, 2004. Document which is not known to the law shall not entitle any relief to a claimant. Public interest always weighs heavier than the private interest. While exemptions are granted at public interest, certain safeguard measures prescribed by notification have to be fulfilled. If the appellant has led evidence about the claim in accordance with law and such a claim was to serve the purpose of manufacture or in relation to manufacture or for providing taxable output service the appellant shall only be entitled to the input credit - matters are remanded to the original authority for re-adjudication - Decided in favour of assessee.

Summary

Issues:
1. Eligibility of input credit for service tax payment.
2. Compliance with Cenvat Credit Rules and Service Tax Rules.
3. Scrutiny of documents and registration of service distributor.
4. Public interest and safeguard measures for revenue protection.

Issue 1: Eligibility of input credit for service tax payment:
The appellant argued that invoices showing payment of service tax in the name of either the head office or the factory should be considered for granting input credit. The appellant relied on specific documents to support the claim, emphasizing that the Commissioner's decision was not in line with the case law cited.

Issue 2: Compliance with Cenvat Credit Rules and Service Tax Rules:
The Departmental Representative contended that Cenvat credit cannot be claimed as a matter of right and must fulfill legal requirements under the Cenvat Credit Rules and Service Tax Rules. The lack of findings regarding the head office's status as a service distributor and the factory's beneficiary status was highlighted, emphasizing the need for scrutiny and compliance with the rules.

Issue 3: Scrutiny of documents and registration of service distributor:
The appellant requested the matter to be sent back to the Original Authority for a detailed examination of the claim, emphasizing the importance of proper scrutiny and compliance with registration requirements for service distributors. The need for a thorough assessment of the appellant's eligibility and compliance with the rules was stressed.

Issue 4: Public interest and safeguard measures for revenue protection:
The judgment emphasized that exemptions cannot be claimed as a matter of right and must adhere strictly to the law to prevent revenue loss. The importance of public interest over private interest, as well as the need for safeguard measures like registration of service distributors, was highlighted. The judgment underscored the necessity for evidence to support claims in accordance with the law to ensure revenue protection.

In conclusion, the judgment remanded both matters to the original authority for re-adjudication, stressing the importance of fair hearings and detailed consideration of all aspects related to safeguard measures for revenue protection. The need for compliance with Cenvat Credit Rules and Service Tax Rules, along with proper scrutiny of documents and registration requirements, was reiterated to ensure the proper assessment of the appellant's claim.