Tribunal rejects claim for cenvat credit on old service tax invoices

The Tribunal upheld the dismissal of the appellant's claim for cenvat credit on service tax paid for invoices dating back to 1999. The Commissioner's decision was affirmed based on the Cenvat Credit Rules, 2004, which only allow credit for input services received after 10.09.2004. Despite the appellant's argument regarding erroneous payment and the absence of a limitation period for claiming credit, the Tribunal found no fault in the Commissioner's reasoning and rejected the appeal.

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Issues:
Appeal against dismissal of cenvat credit claim for service tax paid on invoices from 1999, applicability of Cenvat Credit Rules, 2004, limitation for claiming credit, interpretation of Rule 3.

Analysis:
The appeal was directed against the order dismissing the appellant's claim for cenvat credit on service tax paid on invoices from 1999. The Commissioner (Appeals) upheld the dismissal citing Rule 3 of the Cenvat Credit Rules, 2004, which allows service providers to avail credit for input services received after 10.09.2004. The appellant, a business dealing with computer hardware and software systems, had availed credit in April 2009 for services received in 1999. The audit revealed this discrepancy, leading to a show-cause notice for service tax, interest, and penalty. The original authority and the Commissioner confirmed the demand, prompting the appellant to file the present appeal.

The appellant argued that they erroneously paid service tax on 1999 invoices as they believed service tax was imposed on a reverse charge basis from 18.04.2006 for import of services under Section 66A of the Finance Act. They contended that the amount paid was not due and thus claimed the right to cenvat credit without any limitation period. On the contrary, the AR reiterated that under the Cenvat Credit Rules, 2004, credit can only be claimed for services received after 10.09.2004, emphasizing that credit for services from 1999 was not permissible under the statutory provisions.

The Commissioner (Appeals) noted that the Cenvat Credit Rules, 2004, allow credit for input services received after 10.09.2004. Since the services in question were received in 1999, the credit availed in 2009 was not in compliance with the rules. The Commissioner also highlighted that the appellant had not filed any refund claim but was issued a show-cause notice for irregular cenvat credit availment. Consequently, the Commissioner rejected the appeal based on the clear provisions of the Cenvat Credit Rules, 2004.

Ultimately, the Tribunal upheld the Commissioner's decision, finding no fault in the reasoning provided for dismissing the appellant's appeal. The order was pronounced in open court on 03/01/2017, affirming the dismissal of the appellant's claim for cenvat credit on service tax paid for invoices dating back to 1999.

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