2016 (2) TMI 444 - AT - Service Tax

Court Remands Cenvat Credit Denial, Emphasizes Discretionary Power

The judgment addressed the denial of Cenvat credit on input service invoices due to the absence of the service provider's signature. The court found that ... Cenvat Credit - duty paying documents - computer generated invoices were not signed by the service provider - Revenue contended that Rule 4A of the Service Tax Rules 1994 categorically prescribed that the invoices/challans should be signed by service provider. - Held that:- the condition of Rule 9(2)were fulfilled. It is also noticed that on the identical situation, the Commissioner of Central Excise allowed the credit in respect of the other assessee - However, it is required to examine the documents and therefore the matter is sent back to the Adjudicating Authority to decide afresh after considering the documents and other facts in so far as lose of original invoices due to flood. - matter remanded back - Decided partly in favor of assessee. Issues:Cenvat credit denial on input service invoices due to lack of signature by service provider. Discretionary power of Deputy Commissioner in allowing Cenvat credit. RTI obtained letter showing fulfillment of Rule 9(2) conditions. Discrepancy in treatment of similar cases by Commissioner.Analysis:The judgment involved a common issue of denial of Cenvat credit on input service invoices by the appellants due to the absence of the service provider's signature on the computer-generated invoices. The Revenue contended that Rule 4A of the Service Tax Rules 1994 mandated invoices to be signed by the service provider. However, the appellants argued that they fulfilled the conditions under Rule 9(2) of the Cenvat Credit Rules 2004, allowing for the credit to be taken based on the prescribed documents.Upon review of a letter dated 29.10.2009 obtained under the RTI Act, it was revealed that the conditions of Rule 9(2) were indeed fulfilled by the appellants. The letter highlighted the discretionary power of the Deputy Commissioner to allow Cenvat credit even if the document lacked certain particulars, provided that the goods or services were received and accounted for by the receiver. The judgment emphasized that the discretionary power should be exercised reasonably and fairly to avoid arbitrary decisions.Furthermore, it was noted that the Commissioner of Central Excise had allowed credit in a similar case, indicating a discrepancy in treatment. As a result, the judgment set aside the impugned order and remanded both matters to the adjudicating authority for a fresh decision in accordance with the law. The Adjudicating Authority was instructed to provide a proper opportunity for hearing before passing any new order, ultimately allowing both appeals through remand.