Cenvat credit cannot be denied for a merely defective invoice when tax payment, receipt, and use of service are established.

Cenvat credit was treated as admissible where the service tax had been paid, the taxable service had been received, and the service was actually used, even though the invoice lacked some particulars required under the service tax invoice rules. The Tribunal noted that a merely technical defect in the document could not defeat credit when the substantive conditions under Rule 9(2) were satisfied, and the contrary denial was based on an incorrect reading of the applicable rule. It also found that suppression, limitation, and penalty were not sustainable on the facts because the record supported a bona fide belief about eligibility and did not establish misdeclaration.

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Issues: (i) Whether Cenvat credit could be denied merely because the invoice issued by the input service provider did not contain all particulars required under the service tax invoice rules, where service tax had in fact been paid and the service had been received and used; (ii) whether invocation of suppression and denial of credit on limitation and penalty grounds was sustainable in the facts of the case.

Issue (i): Whether Cenvat credit could be denied merely because the invoice issued by the input service provider did not contain all particulars required under the service tax invoice rules, where service tax had in fact been paid and the service had been received and used.

Analysis: Rule 9(2) of the Cenvat Credit Rules, 2004, as applicable during the relevant period, did not permit denial of credit on a merely technical defect in the document if the essential requirements were satisfied. The relevant inquiry was whether service tax had been paid, the taxable service had been received, and the service was actually used. The authorities below proceeded on an incorrect understanding of the amended position and treated the absence of some particulars in the invoice as fatal, without properly applying the pre-amendment rule and without addressing the evidence of tax payment and receipt of service.

Conclusion: Denial of Cenvat credit on the ground of defective invoice was not sustainable; the finding was in favour of the assessee.

Issue (ii): Whether invocation of suppression and denial of credit on limitation and penalty grounds was sustainable in the facts of the case.

Analysis: The record showed that the services were actually received and the service tax had been paid by the job worker. In these circumstances, the assessee could legitimately entertain a bona fide belief regarding eligibility to credit. The ingredients necessary for suppression or misdeclaration were not made out, and the same factual matrix also weakened the basis for penalty.

Conclusion: Invocation of suppression and the consequential adverse findings on limitation and penalty were not sustainable; the finding was in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief, subject to any lawful review of credit if the related proceedings against the job worker so warranted.

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