2015 (11) TMI 1422 - AT - Service Tax

Tribunal allows Cenvat credit despite invoice discrepancies, penalty waived for lack of malafide intent.

M/s. India Housing Versus Commissioner of Central Excise, Lucknow

The Tribunal ruled in favor of the appellant, allowing them to claim Cenvat credit despite discrepancies in certain invoices. The denial of credit based ... Denial of input service credit - discrepancy in the document on the strength of which Cenvat Credit - Rule 9(2) of Cenvat Credit Rules, 2004 - Appellants has taken Cenvat Credit on the documents which are not correct documents under Cenvat Credit Rules, 2004 - Held that:- as per rule 9(2) of Cenvat Credit Rules, appellant is not entitled to take Cenvat Credit on the strength of these facts - in the case of Music Broadcast Pvt. Ltd., Cenvat credit is sought to be denied by the learned Commissioner (Appeals) on the premise that appellant was not registered at the time of issuance of invoices, I find that said issue has been dealt by the Tribunal in the case of Imagination technologies India P. Ltd [2011 (4) TMI 406 - CESTAT, MUMBAI] - following the precedent decision of this Tribunal, although the appellant was not registered with the service tax department during the relevant time it has availed the services, the appellant is entitled to take Cenvat credit. - neither in the show cause notice nor in the impugned order, it has been disputed that appellant has not availed inputs service and has not paid service tax. - appellant is entitled to take Cenvat credit - Decided in favour of assessee. Issues:1. Denial of input service credit due to discrepancies in documents under Cenvat Credit Rules, 2004.Analysis:The appellant appealed against the denial of input service credit based on discrepancies in documents for which Cenvat Credit was claimed under Rule 9(2) of Cenvat Credit Rules, 2004. The appellant, a service provider, had claimed Cenvat credit on certain services, but during an audit, it was discovered that the appellant had taken credit on documents that did not comply with the rules. The impugned order sought to deny Cenvat credit of Rs. 2,88,134 along with interest and penalties. The appellant challenged this order, arguing that the denial was unjustified.The denial of Cenvat credit was based on discrepancies in five types of invoices. The first issue involved invoices from Music Broadcast Pvt. Ltd., where the appellant relied on specific invoices, but these did not match the invoices mentioned in the show cause notice. The second issue concerned invoices from M/s. India Housing, Lucknow, where the service registration was not indicated. Further, denials were made for invoices from M/s. Studio Parallele New Delhi, Jones Lang Lasalle, Gurgaon, and M/s. Sandalwood, Gurgoan, as the invoices were not in the appellant's name. The Tribunal held that as per Rule 9(2) of Cenvat Credit Rules, the appellant was not entitled to credit on these invoices, leading to a denial of Rs. 51,120.Regarding the issue of registration at the time of invoice issuance, the Tribunal referred to a previous case and concluded that Cenvat Credit cannot be denied for the period before registration by an assessee. The Tribunal emphasized that as long as the appellant had borne the duty on inputs/services and utilized them for taxable output services, they were eligible for tax credit. Consequently, the appellant was deemed entitled to take Cenvat credit despite not being registered with the service tax department during the relevant period of service availing.In the case of invoices issued by Mindz Eye, Lucknow, it was established that the appellant had availed input services, paid service tax, and utilized the services. Following a precedent decision, the Tribunal ruled that the appellant was entitled to Cenvat credit. As there was no evidence of malafide on the appellant's part, the penalty was deemed not imposable and was set aside. The appeal was disposed of in favor of the appellant, affirming their entitlement to Cenvat credit.