2024 (9) TMI 456 - AT - Central Excise

Eligibility of Cenvat credit on the invoices issued by ISD - Duty paying invoices - time limitation. Eligibility of CENVAT Credit - HELD THAT - The first Appellate Authority has not disputed the veracity of the fact that the credit was availed on the ISD invoices, but again went on the fact that the Adjudicating Authority has given the observation that some do not contain the service tax no. registration number while some of them contain the wrong STC No. It is the case of the Appellant that the issue was not whether such ISD invoices were deficient but the issue was whether the service providers such as GTA was required to be registered and required to make payment of service tax or whether registration number of the banks was available or not. The requirements for distributing credit by the ISD unit have been fully met in this case, as evidenced by the invoices provided, which include the registration numbers of service providers along with other details. Therefore, the obligation to provide registration numbers is unequivocally fulfilled. This fact has not been disputed in the impugned orders - Additionally, reliance is placed on the case of M/S RAJENDER KUMAR ASSOCIATESS VERSUS COMMISSIONER OF SERVICE TAX, DELHI-II 2020 (11) TMI 621 - CESTAT NEW DELHI where it was held that once the requirement of relevant rules for issuance of invoices is met, credit cannot be disallowed on the ground that the ISD was not registered. The mandate to obtain ISD registration is not prescribed in law for distribution, and thus, denying the Credit based on allegation that the New Delhi unit was not registered as an ISD unit for three invoices lacks statutory backing and should not impede the Appellant s vested rights. Extended period of limitation - HELD THAT - Section 11A (1) of the Central Excise Act states that the demand could be raised against the Assessee in cases of default only within a period of one year. The proviso extended the normal period of limitation only in cases where there is fraud, suppression, or misstatement of facts on the part of the Assessee. The Appellant has declared all the relevant details pertaining to availment of credit in the returns filed thereby bringing all the information to the knowledge of the Department - It only stated that the Appellant did not take care properly without alleging that such credit was taken intentionally on incomplete documents. Hence, the extended period cannot be invoked as has been held in the case of COMMNR. OF CENTRAL EXCISE, MUMBAI-III VERSUS M/S. ESSEL PROPACK LTD. 2015 (9) TMI 1084 - SUPREME COURT . The impugned order cannot be sustained and is accordingly set aside - Appeal allowed.

Summary

Issues Involved:
1. Inadmissible Cenvat credit on invalid invoices.
2. Supply of invoices by the Department.
3. Justification of Cenvat credit availed.
4. Invocation of the extended period of limitation.
5. Validity of ISD invoices and compliance with statutory requirements.

Issue-wise Detailed Analysis:

1. Inadmissible Cenvat Credit on Invalid Invoices:
The Department alleged that the Appellant availed Cenvat credit based on invoices that were either not issued by registered Service Tax Providers or did not contain the Service Tax Registration number of the service provider. The audit identified specific invoices from GTA Service providers and banking services as inadmissible. The Appellant argued that the Department did not provide the specific invoices which were deemed invalid, thus failing to discharge the onus of proving wrong availment of Cenvat credit.

2. Supply of Invoices by the Department:
The Appellant contended that the Department did not supply copies of the disputed invoices. However, the Commissioner (Appeals) found that it was the Appellant's responsibility to justify the invoices, which were identifiable and discussed in the Order-in-Original. The Department's observation was that some invoices lacked the service tax number or contained incorrect numbers, and the Appellant's submissions were contradictory.

3. Justification of Cenvat Credit Availed:
The Appellant argued that the ISD invoices were produced before the audit and Adjudicating Authority, and the SCN did not specify the deficient documents. The Tribunal found that the requirements for distributing credit by the ISD unit were fully met, as evidenced by the invoices provided, which included the registration numbers of service providers. The Tribunal referenced the case of Rajender Kumar & Associates vs. Commissioner, where it was held that credit cannot be disallowed if the relevant rules for issuance of invoices are met.

4. Invocation of the Extended Period of Limitation:
The Appellant argued that the extended period of limitation under Section 11A(4) of the Central Excise Act was not invocable. The Commissioner (Appeals) found that the material fact was whether malafide intention, wilful suppression, or fraud was involved. The Tribunal, however, found that the Appellant had declared all relevant details in the returns filed, and the audit did not raise doubts on the bona fide of the Appellant. Hence, the extended period could not be invoked, as supported by the case of Commissioner of Central Excise, Mumbai-III vs. Essel Propack Ltd.

5. Validity of ISD Invoices and Compliance with Statutory Requirements:
The Tribunal found that the ISD invoices met the statutory requirements under Rule 9 of Cenvat Credit Rules and Rule 4A (2) of the Service Tax Rules. The invoices contained the necessary details such as the name, address, registration number of the service provider, and the amount of credit distributed. The Tribunal also referenced several cases, including Commissioner of C. Ex., S.T. & Cus., Bengaluru Vs. Hinduja Global Solutions Ltd., and Trident Powercraft Pvt. Ltd. Vs. CCE & ST (LTU), Bangalore, which supported the Appellant's position that credit cannot be denied if the ISD invoices meet the statutory requirements.

Conclusion:
The Tribunal set aside the impugned order, finding that the Appellant had met the statutory requirements for availing Cenvat credit and that the extended period of limitation was not applicable. The appeal was allowed with consequential relief as per law.