2013 (12) TMI 1385 - AT - Service Tax

Denial of Cenvat credit Debit notes not in a prescribed format under Rule 9 of Cenvat credit Rules, 2004 Waiver of Pre-deposit Held that - Following Pharmalab Process Equipments Vs. CCE, Ahmedabad 2009 (4) TMI 142 - CESTAT AHMEDABAD and MISSION PHARMA LOGISTICES (I) PVT. LTD. Versus COMMISSIONER OF C. EX., RAJKOT 2012 (11) TMI 117 - CESTAT, AHMEDABAD - CENVAT Credit can be availed on the basis of debit notes which contained all the ingredients as required under the invoices - the applicant has a strong prima facie case in their favour - Pre-deposit waived till the disposal Stay granted.

Summary

Issues Involved:
- Application seeking waiver of pre-deposit and stay of recovery of duty and penalty
- Availing CENVAT Credit based on debit notes issued by service provider
- Interpretation of Rule 9 of the Cenvat Credit Rules, 2004

Analysis:
1. Waiver of Pre-deposit and Stay of Recovery:
The judgment pertains to an application seeking waiver of pre-deposit and stay of recovery of duty amounting to Rs. 3,84,369/- along with an equal penalty confirmed by lower authorities. The issue at hand involves the applicant availing CENVAT Credit based on debit notes issued by the service provider, M/s Neptune Adhesive & Chemicals. The department denied the CENVAT Credit on the grounds that the debit note is not a prescribed document for availing credit under Rule 9 of the Cenvat Credit Rules, 2004.

2. Interpretation of Rule 9 - Availing CENVAT Credit:
The crux of the matter lies in the interpretation of Rule 9 of the Cenvat Credit Rules, 2004, regarding the validity of availing CENVAT Credit based on debit notes. The learned advocate for the applicant cited precedents such as Pharmalab Process Equipments Vs. CCE, Ahmedabad and CCE, Salem Vs. Pallipalayam Spinners (P) Ltd., among others, to support the contention that CENVAT Credit can indeed be availed on the basis of debit notes, provided they contain all the necessary elements as required in invoices.

3. Tribunal's Decision and Prima Facie Case:
Upon considering the arguments presented by both sides, the Tribunal, represented by Sahab Singh, observed that previous cases have established that CENVAT Credit can be availed based on debit notes if they fulfill the essential conditions akin to invoices. Consequently, the Tribunal found that the applicant has a strong prima facie case in their favor. As a result, the Tribunal decided to waive the pre-deposit and granted a stay on recovery until the appeal is disposed of, aligning with the precedents and the applicant's contentions.

In conclusion, the judgment addresses the pivotal issues of waiver of pre-deposit, the validity of availing CENVAT Credit based on debit notes, and the interpretation of Rule 9 of the Cenvat Credit Rules, 2004. The decision underscores the significance of ensuring that debit notes meet the requisite criteria akin to invoices for the lawful availing of CENVAT Credit, as established by previous tribunal rulings.