Cenvat credit remains valid when invoices are complete, even if the service provider fails to deposit tax.

Cenvat credit cannot be denied to a recipient merely because the service provider failed to deposit service tax or supplied services from an unregistered premises, where the invoices contained the prescribed particulars. Under Rule 4(7) read with Rule 9 of the Cenvat Credit Rules, 2004, the recipient's obligation is limited to paying the invoice value and tax shown therein; it has no duty to verify the provider's remittance to the department. The department's remedy lies against the defaulting supplier, not the compliant recipient, and the demand and penalty were held unsustainable.

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Issues: Whether Cenvat credit could be denied to the recipient of services solely because the service provider did not deposit the service tax and the services were supplied from an unregistered premises, when the invoices contained the requisite particulars.

Analysis: The invoices issued by the service provider contained the value of services, service tax amount, registration number and other necessary particulars. Under Rule 4(7) of the Cenvat Credit Rules, 2004, read with Rule 9 of the Cenvat Credit Rules, 2004, the recipient is required to pay the invoice value and the service tax shown therein before availing credit. The recipient is not under a legal obligation to verify whether the service provider has actually deposited the tax with the department. Any default by the service provider in remitting tax is a matter for proceedings against the service provider, not a ground to deny credit to the recipient who has complied with the requirements within its domain.

Conclusion: Cenvat credit could not be denied to the appellant on the ground of non-payment of service tax by the service provider or because the services were rendered from an unregistered premises.

Final Conclusion: The demand and penalty were unsustainable, and the appellant was entitled to consequential relief.

Ratio Decidendi: Credit validly availed on invoices containing the prescribed particulars cannot be denied to the recipient merely because the supplier failed to deposit the tax; the department's remedy lies against the defaulting supplier.

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