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2018 (5) TMI 107 - AT - Central ExciseCENVAT credit - duty paying documents - on the premise that in some invoices either invoice no. is not mentioned or invoices having hand written number - renting service - Held that - It is not in dispute that the assessee has not received input service having not paid service tax thereon. These services have been used by the assessee in the course of their business of manufacturing, in that circumstance, it is not the case of the Revenue that these input services are not covered under Rule 2(l) of Cenvat Credit Rules, 2004 - credit allowed. CENVAT credit - on the premise that in some invoices either invoice no. is not mentioned or invoices having hand written number - denial on the premise that the said input service is not covered under 2(l) of Cenvat Credit Rules, 2004 for the period prior to 1.4.2011 - Held that - the Technical Director is an employee of the company who assisted the assessee to do day to day manufacturing operation. The rent paid for technical director as terms of employment and is a part of expenses incurred by the assessee - the assessee is entitled to avail credit of service tax paid on rent for residence of Technical Director. Extended period not invokable. Appeal dismissed - decided against Revenue.
Issues:
1. Denial of Cenvat credit on inputs service due to missing or handwritten invoice numbers. 2. Disallowance of credit on renting service for the residence of Technical Director. 3. Applicability of Rule 9(2) of Cenvat Credit Rules, 2004. 4. Interpretation of Rule 2(l) of Cenvat Credit Rules, 2004. 5. Invocation of the extended period of limitation for issuing show cause notice. Analysis: 1. The Revenue argued that missing invoice numbers render the appellant ineligible for credit, citing Rule 9(2) of Cenvat Credit. The judge distinguished cases cited by the Revenue, clarifying that Rule 57GG was not relevant. The judge emphasized that if the authority confirms receipt of inputs/services, credit is valid even without invoice numbers. Hence, the denial of credit based solely on missing invoice numbers was unfounded. 2. The appellant contended that renting service for the Technical Director's residence was essential for business operations. Referring to Ultratech Cement Limited case, the judge ruled that any service aiding manufacturing qualifies for credit. As the Technical Director facilitated daily operations, the rent was a legitimate business expense. Since the service was availed before a rule amendment, the appellant rightfully claimed the credit. The judge upheld the appellant's right to credit for the rent paid. 3. The judge highlighted Rule 9(2) of Cenvat Credit Rules, 2004, emphasizing that if goods/services are received and accounted for, credit should be allowed. This rule was pivotal in determining credit eligibility despite missing invoice details. The judge's interpretation favored the appellant's entitlement to credit. 4. Regarding Rule 2(l) of Cenvat Credit Rules, 2004, the judge clarified that services used in manufacturing operations are credit-worthy. As the Technical Director's residence facilitated business activities, the rent paid was deemed a valid input service. The judge's analysis aligned with the interpretation of relevant rules and legal precedents. 5. The judge noted that the show cause notice was issued under the extended period of limitation. However, the judge ruled that this extension was inapplicable in this case. By dismissing the Revenue's appeal and allowing the appellant's appeal, the judge concluded the case in favor of the appellant based on the detailed analysis of the issues involved.
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