2018 (8) TMI 1102 - AT - Service Tax

CENVAT Credit - denial on the ground that though the Service Providers of the respondent were not registered during April 2004, to August 2004, however, in fact the Service Providers obtained the registration on 27.09.2004 and discharged the Service Tax - Held that - In this fact the respondent is not eligible for such Cenvat Credit at the time of receipt of the invoices. They become eligible at the time after taking the registration by the Service Providers and payment of Service Tax. Therefore, the appellant at the most is liable for interest liability from the date the Cenvat Credit taken till the Service Tax paid by the Service Providers, however, for this reason, Cenvat Credit cannot be denied - Credit allowed. CENVAT Credit - denial on the grounds that it is only name of the appellant - Held that - Since, all the Offices address which mentioned in the invoices belonging to the same respondent. The respondents have received the service and used by them, therefore, merely because the respondent address is not mentioned, credit cannot be denied - Credit allowed. Adjustment of CENVAT Credit in terms of Rule 6(3) of Service Tax Rule, 1994 - Held that - The respondent are eligible to avail the re-credit of ₹ 17,97,248/- under Rule 6(3) of Cenvat Credit Rule, 1994 that the same subject to verification of original document by the Lower Authority that the same are falling within the conditions stipulated in Rule 6(3) of Service Tax Rules,1994 - Matter on remand. Demand of service tax - demand on the ground that period of Service Provision is prior to 10.09.2004, during which the rate of Service Tax was 8% which was enhanced to 10.02% w.e.f 10.09.2004 - Held that - The rate of Service Tax will be applicable as per the period of provision of service and not from the date of invoices or receipt of payment , therefore, Ld. Commissioner (Appeals) has rightly set aside demand of ₹ 1,23,914/- which is upheld. Appeal disposed off.

Summary

Issues:
1. Denial of Cenvat Credit on invoices from unregistered service providers.
2. Denial of Cenvat Credit due to incorrect address on invoices.
3. Disallowance of Cenvat Credit under Rule 6(3) of Service Tax Rules, 1994.
4. Confirmation of short payment of Service Tax.
5. Imposition of penalty under Section 76 of Finance Act, 1994.

Analysis:
1. The first issue pertains to the denial of Cenvat Credit amounting to ?18,91,073/- due to invoices from unregistered service providers. The appellant argued that the service providers obtained registration later and discharged the Service Tax. The tribunal upheld the Commissioner's decision, stating that the appellant became eligible for credit after the service providers registered and paid the tax. The appellant was liable for interest but not denial of credit.

2. The second issue concerns the denial of Cenvat Credit of ?18,699/- due to incorrect address on invoices. The tribunal agreed with the Commissioner's decision that since the addresses on the invoices belonged to the same appellant and the services were used by them, credit cannot be denied based solely on the address discrepancy.

3. The third issue involves the disallowance of Cenvat Credit under Rule 6(3) of Service Tax Rules, 1994 amounting to ?17,97,248. The tribunal found discrepancies in the Commissioner's order and remanded the matter for further verification to ensure the credit adjustment complies with the conditions stipulated in the rule.

4. The fourth issue pertains to the confirmation of short payment of Service Tax amounting to ?1,23,914. The tribunal upheld the Commissioner's decision to set aside the demand as the rate of Service Tax applicable was determined by the period of service provision and not the date of invoices or payment receipt.

5. The final issue involved the imposition of a penalty of ?5,00,000 under Section 76 of the Finance Act, 1994, which was set aside by the Commissioner. The tribunal did not specifically address this issue in the judgment, indicating no further action was necessary regarding the penalty.

In conclusion, the tribunal upheld the Commissioner's decisions on the denial of Cenvat Credit due to unregistered service providers and incorrect address on invoices. The matter of credit adjustment under Rule 6(3) was remanded for further verification, and the demand for short payment of Service Tax was set aside. The penalty imposed under Section 76 was not addressed in the judgment, indicating it was not upheld.