Tribunal allows appeal on cenvat credit eligibility and Rule 4(7) contravention

The Tribunal allowed the appeal in favor of the appellant regarding the eligibility for availing cenvat credit based on supplementary invoices, citing precedent that such invoices could be valid for claiming credit. Additionally, the Tribunal ruled in favor of the appellant on the contravention of Rule 4(7) of the Cenvat Credit Rules, as the appellant rectified the issue by paying interest for early credit availment, leading to the dismissal of the objection raised by the Commissioner (Appeals).

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Issues:
1. Eligibility for availing cenvat credit based on supplementary invoices.
2. Contravention of Rule 4(7) of the Cenvat Credit Rules.

Analysis:
1. Eligibility for availing cenvat credit based on supplementary invoices:
The case involved the appellant, a manufacturer of aerated water/mineral water, who availed cenvat credit on service tax paid for manpower recruitment services through a supplementary invoice issued by the service provider. The Service Tax Department objected, citing that supplementary invoices were not eligible documents for claiming cenvat credit under Rule 9 of the Cenvat Credit Rules, 2004. The Commissioner (Appeals) upheld the disallowance of cenvat credit. However, the appellant argued that there was no prohibition in the rules against availing credit based on supplementary invoices. The Tribunal referred to a previous decision involving Delphi Automotive System Pvt. Ltd., where it was established that supplementary invoices could be considered valid documents for claiming cenvat credit. As a result, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

2. Contravention of Rule 4(7) of the Cenvat Credit Rules:
The Commissioner (Appeals) also noted a contravention of Rule 4(7) of the Cenvat Credit Rules, as the appellant had taken credit before making payment to the service provider. However, the Tribunal found that the appellant had regularized this issue by depositing interest related to the early availment of credit. Since the appellant had compensated the government by paying the interest, the Tribunal concluded that there was no justification for denying the cenvat credit. Consequently, the Tribunal set aside the impugned order, ruling in favor of the appellant.

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