2024 (2) TMI 904 - AT - Central Excise

Refund/rebate claim under N/N. 41/2012-ST on the credit availed on debit notes - rejection only on the ground that credit has been availed on debit notes and that these are not valid documents for availing credit as per Rule 9 of CENVAT Credit Rules, 2004 - HELD THAT - On perusal of Order in Original No. 84/2013 dated 4.10.2023, it is stated by the adjudicating authority that the refund claim was verified and service tax could be correlated with the export documents. So also it is seen that specified services were received by the appellant and all documents were and required certificates submitted along with the refund claim. In para 9, it is stated that the refund claim was verified thoroughly and it is arithmetically in order. The department has conducted proper verification as to whether service tax was paid and services were availed by the appellant. The proviso to Rule 9 states that in case of any doubt with regard to the particulars mentioned in the document on which credit has been availed, the AC/DC can conduct verification and on being satisfied can allow the credit. In the present case, there is no evidence to show that the appellant has not paid service tax or not availed the specified services. The reason for rejection of refund / rebate is that debit notes are not valid documents under Rule 9 of CCR, 2004. The above issue as to whether debit notes can be accepted as documents for availing credit is settled by various decisions. In the case of M/S. GATES UNITTA INDIA COMPANY PVT. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2021 (9) TMI 688 - CESTAT CHENNAI , the Tribunal held that the credit cannot be denied on the ground that document on which credit is availed is a debit note. The rejection of refund claim is not justified. The appellant is eligible for refund. The impugned order is set aside - Appeal allowed.

Summary

Issues involved: Interpretation of Notification 41/2012-ST for rebate/refund claims, validity of debit notes for availing credit under Rule 9 of CENVAT Credit Rules, 2004.

Summary:

Issue 1: Rebate/Refund Claims under Notification 41/2012-ST
- The appellant filed rebate/refund claims as per Notification 41/2012-ST but part of the claim was disallowed by the refund sanctioning authority.
- Commissioner (Appeals) rejected the entire rebate claim, leading to the appeal before the Tribunal.
- Appellant argued that debit notes are valid documents for claiming credit under the notification, citing precedents like Gates Unitta India Co. Pvt. Ltd. Vs. CCE, Chennai.
- Department contended that only prescribed documents like invoice, Bill of Entry, or challan are valid for availing credit, not debit notes.

Issue 2: Validity of Debit Notes for Availing Credit
- The main issue was whether the appellant could claim refund/rebate under Notification 41/2012-ST based on credit availed on debit notes.
- Department argued that debit notes did not contain necessary particulars for availing credit as per Rule 9 of CCR, 2004.
- However, the Tribunal found that the appellant had paid service tax and availed specified services, and the rejection was solely based on the premise that debit notes are not valid documents under Rule 9.
- Precedents like Gates Unitta India Pvt. Ltd. and Grasim Industries Ltd. supported the acceptance of debit notes for availing credit, emphasizing that necessary particulars being present justifies credit acceptance.

Conclusion:
- The Tribunal held that the rejection of the refund claim based on the use of debit notes was unjustified.
- Citing relevant case laws and precedents, the Tribunal allowed the appeals and set aside the impugned order, declaring the appellant eligible for refund with consequential reliefs.