2017 (6) TMI 1064 - AT - Central Excise

Tribunal allows CENVAT credit on past services, following JSW Steels Ltd case.

Commissioner of Central Excise Nagpur Versus ACE Calderys Ltd.

The Tribunal upheld the Commissioner of Central Excise (Appeals) order allowing the availing of CENVAT credit against supplementary invoices for services ... CENVAT credit - supplementary invoices issued by contractors - rule 9(1)(b) of CCR, 2004 - Held that: - Undoubtedly, the availment of credit against invoices, primary or supplementary, is not permitted if the duty is discharged consequence of proceedings initiated for recovery in circumstances of fraud, collusion, wilful misstatement, suppression of facts or contravention of provisions of the taxing statute. However, at the same time, it is seen that while there is specific restriction on utilisation of supplementary invoices pertaining to supply of goods the enumeration of documents relating to services does not envisage a separate treatment of supplementary invoices. Similar issue decided in the case of M/s Delphi Automotive Systems (P) Limited Versus CCE, Noida [2013 (12) TMI 156 - CESTAT NEW DELHI], where it was held that the term ‘invoice’ mentioned in Clause (f) and (g) of Rule 9 (1) of Cenvat Credit Rules, 2004 has to be treated including supplementary invoice, as during the period of dispute, with regard to service tax payment, the Rule 9 (1) did not make any distinction between ‘invoice’ and ‘supplementary invoice’. Appeal dismissed - decided against Revenue. Issues:1. Availment of CENVAT credit against supplementary invoices issued by contractors for services rendered in the past.2. Interpretation of rule 9(1)(b) of CENVAT Credit Rules, 2004 regarding the availment of credit of duties paid under the recovery provision of Central Excise Act, 1944.3. Validity of availing credit on invoices issued long after the rendering of services.4. Finality of the decision of the Tribunal in JSW Steels Ltd v. Commissioner of Central Excise, Salem [2009 (90) RLT 106 (CESTAT-Chennai)].5. Treatment of supplementary invoices in relation to the restriction on utilisation of invoices for supply of goods and services.Analysis:1. The case involved a challenge by the Revenue against the order of the Commissioner of Central Excise (Appeals) regarding the availment of CENVAT credit amounting to Rs. 13,13,274 against supplementary invoices issued by contractors for services rendered between June 2005 and March 2006 as well as 2006-07. The Revenue contended that the credit was availed in contravention of rule 9(1)(b) of CENVAT Credit Rules, 2004, which prohibits credit of duties paid under the recovery provision of the Central Excise Act, 1944.2. The appellant argued that the tax was paid by the service provider in August-September 2007 for services from 2005-06 and 2006-07, leading to the issuance of supplementary invoices. The Revenue claimed that since the invoices were issued long after the services were rendered, they should not be eligible for credit as per rule 4(a) of the Rules. The appellant also questioned the finality of the decision in JSW Steels Ltd case.3. The Tribunal noted that while there are restrictions on utilising supplementary invoices for the supply of goods, there is no separate treatment specified for supplementary invoices related to services. The Tribunal emphasized that credit cannot be availed if the duty is discharged due to fraud, collusion, or contravention of tax provisions. However, in this case, the invoices for services were not specifically restricted.4. The Tribunal referred to the decision in M/s Delphi Automotive Systems (P) Ltd case, which clarified that during the relevant period, supplementary invoices should be treated similarly to original invoices for the payment of duty. The Tribunal highlighted that the rules did not distinguish between regular and supplementary invoices for services, unlike for goods. It was also noted that restrictions on availing credit for additional service tax were not applicable retrospectively.5. Ultimately, the Tribunal dismissed the appeal by the Revenue, concluding that the availed credit against supplementary invoices for services was permissible based on the interpretation of the relevant rules and precedents cited. The decision of the Tribunal in JSW Steels Ltd case was upheld, emphasizing the consistent approach in treating supplementary invoices for services.