2016 (12) TMI 155 - AT - Central Excise

Denial of CENVAT credit - forged documents - the debit notes were not prescribed documents and did not contain the details as required in order to avail Cenvat credit - Held that - The debit notes contained details with address of the person who issued the same as well as the recipient. The credit distributed were specified with period. The debit note is with enclosures which contained elaborate details regarding invoice date the name of the provider of service nature of service amount of service tax paid on such invoice etc. All the particulars relevant and required in terms of Rule 9 of Cenvat Credit Rules 2004 are available in the said debit notes and its enclosures. We find in Shriram Pistons & Rings Ltd. vs. CCE Ghaziabad 2012 (11) TMI 377 - CESTAT NEW DELHI the Tribunal examined similar set of facts and held that credit cannot be denied if the inputs have been received by a manufacturer under the invoices of the service providers issued in the name of head office the head office had taken Cenvat credit and thereafter passed on the same to its manufacturing units only on the ground that the said credits were passed on by letters and not by the document bearing the name invoices or challans . The only requirement is that the documents or letters issued by the head office should contain all the details which are required to be mentioned in the invoices/challans issued by the input service distributor. In the present case we find there is no dispute regarding the eligibility of various input services for the credit. The dispute is more on the documentation followed by the Input Service Distributor. Debit note and its enclosures contained all the required details for a valid distribution of eligible credits - the denial of credit to the appellant is not based on any substantial legal provisions. The documentations followed by the Input Service Distributor in the present case contains the required/relevant particulars to enable the appellant to avail the credits. We find no justification for denial of credit on the grounds taken by the lower Authorities - appeal allowed - decided in favor of assessee.

Summary

Issues:
- Validity of debit notes for availing Cenvat credit
- Details required in debit notes for due availment of credit
- Interpretation of Rule 9 of Cenvat Credit Rules, 2004
- Comparison with similar cases
- Justification for denial of credit by lower Authorities

Analysis:

The appeal in this case challenges an order by the Commissioner of Central Excise, Indore, regarding the eligibility of the appellants, engaged in shock absorber manufacturing, for availing Cenvat credit on input services. The issue revolved around the debit notes issued by the head office/branch office acting as an "input service distributor," which were alleged to lack the necessary details for credit availment. The Original Authority denied credit of &8377; 50,40,216/- and imposed an equivalent penalty.

Upon review, the Tribunal found that the debit notes in question contained all the essential particulars as required by Rule 9 of the Cenvat Credit Rules, 2004. The notes included details of the issuer, recipient, specific credits distributed, and enclosures with comprehensive information like invoice date, service provider's name, service nature, and service tax amount. Citing precedent from Shriram Pistons & Rings Ltd. vs. CCE, Ghaziabad, the Tribunal emphasized that credit cannot be refused merely based on the form of credit transfer, as long as all necessary details are present in the documents issued by the input service distributor.

In analyzing the impugned order, the Tribunal concluded that the denial of credit lacked a substantial legal basis. The documentation provided by the Input Service Distributor met the requirements for credit availment, and there was no valid reason for the lower Authorities' decision. Citing various decided cases such as M/s Emmes Metals Pvt. Ltd. vs. CCE, Mumbai and The Supreme Industries Ltd. vs. CCE LTU, Mumbai, the Tribunal overturned the impugned order and allowed the appeal, stating that the appellant was entitled to the credit.

In summary, the judgment highlighted the importance of fulfilling the necessary details in debit notes for availing Cenvat credit, emphasizing that the form of credit transfer should not be a sole basis for denial. The decision provided clarity on the documentation requirements and set aside the denial of credit by the lower Authorities, ultimately ruling in favor of the appellant.