9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 1071 - AT - Service TaxCENVAT credit - input services - shared service expenses based on the debit notes issued by the sister concerns - Revenue was of the view that the input services were provided by other service providers and not by any of the sister concerns and therefore the availment of cenvat credit based on debit notes issued by the sister concerns is incorrect - Rule 9 of CCR - HELD THAT - The appellant had rightly classified the credit under the heading 1.3.2.2.3- on input services received directly from April 2012 onwards. Since the appellant have rectified the bona fide mistake on being pointed out by the audit, we do not find any mala fide intention that the appellant have suppressed the facts - Further in view of the various decision relied upon by the appellant, it has been consistently held by the Tribunal that debit note issued by the sister concerns is a valid document under Rule 9 of CCR to avail cenvat credit if it contains all the details of the service as well as tax amount as required under rule 9. The impugned order denying the cenvat credit on shared expenses is not legally sustainable - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Availment of CENVAT credit on shared service expenses based on debit notes issued by sister concerns. 2. Availment of CENVAT credit on input services received by sister concerns and the appellant, with the entire credit availed by the appellant. 3. Requirement of Input Service Distributor (ISD) registration for sharing expenses and availing credit. 4. Validity of debit notes as documents for availing CENVAT credit. 5. Allegations of misdeclaration and procedural compliance. Issue-wise Detailed Analysis: 1. Availment of CENVAT credit on shared service expenses based on debit notes issued by sister concerns: The appellant availed CENVAT credit based on debit notes issued by sister concerns for shared service expenses. The Revenue contended that the input services were provided by other service providers, not the sister concerns, and thus credit availed based on debit notes was incorrect. The Tribunal found that the appellant and their sister concerns had a legitimate agreement for sharing expenses, and service tax was discharged on these expenses. The Tribunal concluded that denying CENVAT credit in this context was unjustified, as the debit notes contained all prescribed details under the CENVAT Credit Rules, 2004. 2. Availment of CENVAT credit on input services received by sister concerns and the appellant, with the entire credit availed by the appellant: The appellant initially availed the entire credit based on invoices issued by service providers and later recouped the respective share from sister concerns via debit notes. The Tribunal found that the appellant had incurred expenses for input services, and the credit availed matched the tax paid by the sister concerns. The Tribunal accepted a certificate from an independent Chartered Accountant verifying this matching, thus validating the appellant's claim. 3. Requirement of Input Service Distributor (ISD) registration for sharing expenses and availing credit: The Revenue argued that credit could only be shared through ISD registration, which the appellant and sister concerns did not have. The Tribunal held that ISD registration is not mandatory for availing CENVAT credit, citing precedents like State Bank of Patiala Vs. CCE, Chandigarh and Fraser and Ross Deloitte Centre Vs. CST-I. The Tribunal noted that each unit was a separate legal entity, making ISD provisions inapplicable. 4. Validity of debit notes as documents for availing CENVAT credit: The Tribunal referred to several decisions, including Dhananjay Industrial Engineer (P) Ltd. Vs. CCE, Mumbai-II and Amara Raja Electronics Ltd. Vs. CCE, Tirupathi, which established that debit notes are valid documents under Rule 9 of the CCR for availing CENVAT credit if they contain all necessary details. The Tribunal found that the debit notes in question met these requirements. 5. Allegations of misdeclaration and procedural compliance: The Revenue alleged that the appellant misdeclared CENVAT credit as "credit taken as input services received from ISD" in service tax returns. The appellant rectified this mistake upon audit, classifying the credit correctly from April 2012 onwards. The Tribunal found no evidence of mala fide intent or suppression of facts, ruling out the imposition of penalties and extended period of limitation. Conclusion: The Tribunal set aside the impugned order denying CENVAT credit on shared expenses, allowing the appellant's appeal. The Revenue's appeal against the order allowing CENVAT credit for a subsequent period was dismissed, upholding the Commissioner (Appeals) decision. The Tribunal confirmed that the appellant was entitled to CENVAT credit based on debit notes and that ISD registration was not mandatory.
|
