2024 (10) TMI 1179 - AT - Service Tax

Recovery of credit of tax paid availed on receipt of services under CENVAT Credit Rules, 2004, on the ground that either registration number was missing in the tax paying documents or that the number itself was incorrect - rule 9 of CENVAT Credit Rules, 2004 - HELD THAT - As the inadequacy in the documents is deemed to a technical error and that there is no allegation record that the services had not been rendered or that tax had not been discharged, there is no reason to uphold the impugned order. The appeal is allowed.

Summary

Issues:
Recovery of tax credit under CENVAT Credit Rules, 2004 based on missing or incorrect registration numbers in tax documents.

Analysis:
The appeal challenged the order of the Commissioner of CGST & Central Excise (Appeals-II), Mumbai, upholding the recovery of tax credit amounting to Rs. 42,00,480/- by M/s Sumit Bhoomi Ventures due to missing or incorrect registration numbers in tax documents. The original authority denied the credit citing Rule 9 of CENVAT Credit Rules, 2004, which mandates certain particulars to be available in relevant documents. The appellant's Chartered Accountant referred to a Tribunal decision in Mafatlal Industries Ltd v. Commissioner of Central Excise & Service Tax, Ahmedabad to support their case.

The Authorized Representative argued that Rule 9 does not allow discretion regarding the adequacy of information in documents. However, a previous Tribunal decision highlighted that denying credit solely based on technical infractions, such as missing registration numbers, may not be justified if the tax was paid, and services were received.

The judgment emphasized the importance of proper verification of documents and pointed out that the name and address of the person receiving taxable service are not mandatory requirements as per Rule 9(2) of CENVAT Credit Rules. The judgment criticized the original authority for not conducting a thorough verification and for incorrectly disallowing the credit based on alleged deficiencies in the documents.

The judgment highlighted discrepancies in the observations made by the original authority and the Commissioner (Appeals) regarding the alleged suppression of facts by the appellant. It was noted that the appellant was not obliged to produce specific documents to prove credit eligibility. The judgment also questioned the invocation of the extended period for recovery, especially when there was a prevailing view supporting the admissibility of credit for services rendered by a commission agent.

Ultimately, the judgment ruled in favor of the appellant, considering the inadequacy in the documents as a technical error and finding no evidence that services were not rendered or taxes were not paid. The impugned order was set aside, and the appeal was allowed, granting relief to the appellant.