CENVAT credit allowed for pre-registration inputs and missing registration on invoices under CENVAT Credit Rules, 2004; refunds upheld

CESTAT, Mumbai held that the appellant, a software service exporter, was entitled to CENVAT credit on inputs and input services received prior to obtaining service tax registration, as there is no bar under the CENVAT Credit Rules, 2004, when duty incidence and use in taxable output services are established. Credit could not be denied merely because invoices did not bear the input service provider's registration number, provided tax payment and service utilization were proved, following prior Tribunal precedent. Further, service tax paid on repair of a coffee vending machine was treated as eligible input service, being in relation to output service. The appeals were allowed and refund granted.

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Issues:
1. Entitlement to CENVAT credit on input services used prior to registration.
2. Denial of CENVAT credit due to missing registration number on invoices of input services.
3. Eligibility of CENVAT credit for service tax paid on repair of coffee machine.

Analysis:

Issue 1: Entitlement to CENVAT credit on input services used prior to registration:
The appellant, a software services provider, sought a refund of input service tax credit for services used in exporting services before their registration with the excise department. The claim was rejected based on the timing of registration. The appellant argued that there is no specific provision prohibiting credit before registration as long as the duty was borne and services were used in output services. The Tribunal cited a previous order supporting the appellant's position, emphasizing that credit cannot be denied for the period before registration. The Tribunal agreed with this view, allowing the appellant's claim.

Issue 2: Denial of CENVAT credit due to missing registration number on invoices:
The appellant's claim was partially rejected due to missing registration numbers on service provider invoices. However, the appellant contended that as per Rule 9(2) of the CENVAT Credit Rules, if the service has been accounted for and utilized, credit should be allowed even with missing particulars. The Tribunal referred to a previous case where credit was allowed despite missing registration numbers, emphasizing that as long as payment and utilization were established, credit should be granted. The Tribunal found in favor of the appellant, allowing the service tax credit and subsequent refund.

Issue 3: Eligibility of CENVAT credit for service tax paid on repair of coffee machine:
The appellant claimed CENVAT credit for service tax paid on repairing a coffee machine used to provide coffee to employees. They argued that this service was essential for their output service and thus eligible for credit. The Tribunal agreed with the appellant, stating that the repair of the coffee machine was an input service in relation to the output service provided. Consequently, the Tribunal upheld the appellant's entitlement to the service tax credit for the repair of the coffee machine.

In conclusion, the Tribunal allowed the appeals filed by the appellant, granting them relief in all three issues discussed in the judgment.

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