2014 (6) TMI 584 - AT - Central Excise

CENVAT Credit - Credit on strength of debit notes - duty paying documents - Held that - Rule 4A of Service Tax Rules, 1944 provides that the taxable service to be provided or credit to be distributed on invoices, bill, challan. It has also prescribed that such invoices, bill or challan or as the case may be, shall be serially numbered and shall contain the name, address and the registration number of such person and other informations as specified therein. It appears that the debit notes placed by the learned counsel and that the debit notes issued by the service provider had fulfilled all the conditions as prescribed under Rule 4A (1) of the Service Tax Rules, 1944. - there is no reason to deny the credit on the basis of the debit notes subject to verification of the documents placed by the learned counsel. - matter remanded back - Decided in favour of assessee.

Summary

Issues: Denial of CENVAT credit on input services based on debit notes issued by CHA, validity of debit notes under Rule 9(1) of CENVAT Credit Rules, 2004, applicability of Rule 4A of Service Tax Rules, 1994, limitation period for invoking extended period, imposition of penalty.

Analysis:

1. Denial of CENVAT Credit: The appellant, engaged in manufacturing Asbestos Cement Sheets, availed CENVAT credit on input services using debit notes issued by CHA. The show-cause notice proposed to deny credit mainly due to the use of invalid documents. The original authority and Commissioner (Appeals) upheld the denial, emphasizing the inadequacy of debit notes under Rule 9(1) of CENVAT Credit Rules, 2004.

2. Validity of Debit Notes: The appellant argued that the debit notes fulfilled the requirements of Rule 4A(1) of Service Tax Rules, 1994, citing certificates from CHA and relevant decisions of the Tribunal. The AR contended that debit notes were not specified documents under Rule 9(1), and the appellant failed to prove their validity. The Tribunal noted that the debit notes met Rule 4A conditions, allowing credit based on them, subject to document verification.

3. Limitation Period: The AR invoked the extended limitation period, supported by the Supreme Court's decision in Collector of Central Excise Vs. Doaba Cooperative Sugar Mills. The Tribunal directed the original authority to reevaluate the limitation issue along with the penalty, providing a comprehensive opportunity for the appellant to present their case.

4. Decision and Remand: After considering submissions and precedents, the Tribunal set aside the previous orders and remanded the case for fresh adjudication. The original authority was instructed to thoroughly review all aspects, including the validity of debit notes, limitation, and penalty imposition, ensuring due process and fair consideration for the appellant.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, relevant legal provisions, and the Tribunal's decision to remand the case for further examination, maintaining procedural fairness and adherence to legal principles.