2023 (5) TMI 895 - AT - Service Tax

CENVAT Credit - credit in respect of services received prior to registration - HELD THAT - In terms of Rule 4A(1) of Service Tax Rules, 1994 the invoice or the challan shall be serially numbered and shall contain the name, address and registration number of such person (i.e. provider of the services); name and address of the person receiving taxable service; description and value of taxable service provided or agreed to be provided and the service tax payable thereon. It is found that as submitted by the appellants, there is no requirement to indicate in the invoice, the registration number of the receiver, who avails Cenvat credit, i.e. in the instant case of the appellants. It is also found that proviso to Rule 9(1) of Cenvat Credit Rules provides that even if the duty paying documents (i.e. the invoice, bill or challan issued by the person who is providing taxable service to taxable output service provider such as the appellant) does not contain all particulars but contain the details of duty or service tax paid or payable, description of the goods or taxable service, assessable value, (central excise or service tax registration number of the person issuing the invoice, as the case may be), name and address of the factory or warehouse or premises of first or second stage dealers or provider of output service, credit may be allowed. To this extent, there is force in the argument of the appellants. The Tribunal Mumbai in the case of TATA BUSINESS SUPPORT SERVICES LTD. VERSUS COMMR. OF S.T. -VII, MUMBAI 2019 (8) TMI 1647 - CESTAT MUMBAI observed that The sweeping assertion of non-existence merely owing to non-registration is not dissimilar to the symbolic discountenancing by Pontius Pilate that relegated him to a mere footnote in history. In the absence of express articulation of lack of satisfaction, Rule 9 of Cenvat Credit Rules, 2004 does not come to the assistance of Revenue. The impugned order is not sustainable and is liable to be set aside - Appeal allowed.

Summary

Issues:
The issues involved in the judgment are the eligibility of Cenvat credit in respect of services received prior to registration and the procedural irregularities/lapses in availing Cenvat credit.

Eligibility of Cenvat Credit:
The appellants, engaged in providing 'manpower recruitment agency' and 'commercial training or coaching' services, wrongly availed Cenvat credit on input services and invoices issued in the name of locations not included in Centralized registration. The appellants argued that Rule 4A of the Service Tax Rules does not impose an obligation for the service recipient to be registered. They cited various cases to support their claim. The Tribunal observed that once the requirements of Rule 4A and Rule 9 of Cenvat Credit Rules are satisfied, the benefit of Cenvat credit cannot be denied. The Tribunal also noted that the absence of registration number of the receiver in the invoice does not invalidate the credit claim. Relying on precedents, the Tribunal held that the denial of Cenvat credit on unregistered premises is unjustified.

Procedural Irregularities/Lapses:
The appellants contended that the non-registration of branches was a procedural lapse and did not affect the eligibility of credit usage for providing taxable output services. They argued that substantive benefit cannot be denied due to procedural irregularities. The appellants maintained that the department was aware of the credit availed as returns were filed regularly. The Tribunal agreed with the appellants, stating that the extended period for issuing a show cause notice can only be invoked in cases of tax evasion or intent to evade payment. As the department was aware of the credit availed, there was no suppression of facts. Therefore, the demand was deemed unsustainable, and the question of penalty and interest did not arise. The Tribunal cited relevant case law to support its decision.

Conclusion:
After hearing both sides and examining the records, the Tribunal found that the impugned order was not sustainable. The Tribunal set aside the order, emphasizing that the denial of Cenvat credit based on procedural irregularities was unjustified. The judgment was pronounced on 22.05.2023.