2014 (2) TMI 159 - AT - Central Excise

Rule 21 of CESTAT (Procedure) Rules, 1982 - Ex-parte order - whether the Respondent could take Cenvat credit of service tax paid in respect of input services received, on the basis of documents called debit notes issued by service provider - Rule 9 of the Cenvat Credit Rules, 2004 - Held that - Assessee is entitled to take credit on the basis of debit notes as the same is having all the particulars required to be mentioned in the invoices. Therefore, following the ratio of the decision in the case of Grasim Industries Ltd. (supra), I allow the credit taken by the appellant and set aside the impugned order - Following decision of CCE vs. Grasim Industries ltd. 2011 (7) TMI 944 - CESTAT, NEW DELHI - Decided in favour of assessee.

Summary

Issues:
- Denial of input service credit based on debit notes

Analysis:
The appellant, a manufacturer of Rigid PVT films/PVC sheets, appealed against the denial of input service credit based on debit notes issued by a Commission Agent for services provided. The Revenue contended that debit notes are not specified documents under Rule 9(2) of CENVAT Credit Rules, 2004 for taking credit. The appellant argued that although debit notes are not specifically prescribed under Rule 9(1), they are valid duty-paying documents for credit purposes and can be treated as invoices. The appellant relied on the decision in the case of CCE vs. Grasim Industries Ltd. where it was held that credit can be taken based on debit notes having all required invoice particulars.

The Tribunal, citing the precedent set in the case of Grasim Industries Ltd., ruled in favor of the appellant. It held that the appellant is entitled to take credit on the basis of debit notes as they contain all necessary invoice details. Consequently, the impugned order denying input service credit was set aside, and the appeal was allowed with any consequential relief. The judgment highlights the significance of the content and validity of documents like debit notes in claiming CENVAT credit, emphasizing adherence to prescribed invoice particulars for eligibility.

This judgment clarifies the interpretation and application of CENVAT Credit Rules regarding the acceptance of debit notes as valid documents for claiming input service credit. It underscores the importance of ensuring that documents like debit notes contain all requisite details akin to invoices to qualify for credit eligibility. The ruling provides guidance on the relevance of past decisions in similar cases, establishing consistency and precedent in determining credit entitlement based on specific document types. The judgment serves as a reference for future cases involving the acceptance of non-traditional documents for credit purposes, setting a standard for evaluating the sufficiency of document content for credit claims.