2011 (10) TMI 572 - AT - Service Tax

Tribunal grants stay on pre-deposit during appeal, emphasizes documentation importance

M/s. Akshar Courier Service Versus Commissioner of Central Excise, Vadodara

The Tribunal granted an unconditional stay on the pre-deposit of service tax, interest, and penalty during the appeal's pendency. The judgment emphasized ... - Issues:Cenvat credit denial based on invoices not in the name of the appellant.Analysis:The judgment revolves around the denial of Cenvat credit amounting to Rs. 2,04,498/- on service tax paid on input service from October 2003 to September 2006, along with the imposition of interest and penalty under Section 78 of the Finance Act, 1994. The appellant argued that the credit was disallowed solely because the invoices were in the name of Akshar Enterprises, a dummy unit created for specific service providers' requirements. The appellant contended that Akshar Enterprises and Akshar Couriers were the same entity, supported by a letter from First Flight Couriers confirming the same. The Commissioner (Appeals) acknowledged Akshar Enterprises as a dummy unit and stated that the absence of the appellant's name on the invoices was the sole reason for disallowance and penalty imposition. The appellant invoked Rule 9(2) of the Cenvat Credit Rules, 2004, asserting that the service receiver's name was not an essential requirement and requested credit allowance.The Departmental Representative argued that Rule 3 of the Cenvat Credit Rules mandated the service to be received by the credit claimant, emphasizing that if the invoice was not in the appellant's name, credit could not be granted. Additionally, the Department contended that the service receiver's name was a fundamental requirement, making Rule 9 inapplicable in this case, rendering the credit inadmissible. However, the Tribunal analyzed Rule 9(2) which allows credit if the document contains certain particulars and the service has been accounted for in the receiver's books. The Tribunal noted that the service tax had been properly accounted for by the appellant and that the essential details were present in the document, satisfying the proviso to Rule 9(2). Considering these factors, the Tribunal found a prima facie case in favor of the appellant, granting an unconditional stay on the pre-deposit of service tax, interest, and penalty during the appeal's pendency.In conclusion, the judgment highlights the interpretation and application of Cenvat Credit Rules concerning the essential requirements for credit allowance, emphasizing the importance of proper documentation and accounting for services received. The Tribunal's decision to grant a stay on recovery underscores the significance of establishing a prima facie case for credit eligibility, even in scenarios where invoices may not directly reflect the appellant's name.