Tribunal grants cenvat credit after Department fails to prove pre-rule services

The Tribunal set aside the order denying cenvat credit of service tax to the appellant, ruling that the Department failed to prove services were provided before the effective date of the Cenvat Credit Rules, 2004. The appellant's evidence, including a certificate from the service provider, indicated services were rendered after the specified date. As the Department did not dispute the certificate's authenticity or provide contrary evidence, the appellant was granted the cenvat benefit, and the appeal was allowed with consequential relief.

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Issues:
- Denial of cenvat credit of service tax due to services received prior to the effective date of Cenvat Credit Rules, 2004.

Analysis:
The appeal was filed against the order denying cenvat credit of service tax by the Commissioner Central Excise (Appeals) on the grounds that services indicated in the invoices were received before 10.09.2004 when the Cenvat Credit Rules, 2004 were not in effect. The appellant argued that the disputed invoices issued by the service provider were for services rendered after the enactment of the Cenvat Credit Rules, 2004. The appellant presented a certificate from the service provider, certifying that the services were completed after 10.09.2004. The appellant contended that the burden of proof lies with the Department to show that the services were provided before the effective date, which was not satisfactorily discharged by the Department.

The Cenvat Credit Rules, 2004 were enacted on 10.09.2004, and Rule 3 of the Rules specified that input services received after this date would be eligible for cenvat credit. The Department denied the cenvat benefit to the appellant for services related to invoices issued after the effective date, citing that the services were provided before 10.09.2004. However, the Department failed to provide evidence demonstrating that the services were completed before the effective date. The appellant produced a certificate from the service provider stating that the work was completed after 10.09.2004. The Tribunal noted that the Department did not dispute the genuineness of the certificate, and no findings were made to disprove it. As a result, since there was no material evidence to prove completion before 10.09.2004, the cenvat benefit could not be denied to the appellant. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant with any consequential relief as per law.

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