2019 (4) TMI 123 - AT - Central Excise

Tribunal overturns denial of Cenvat credit, stresses importance of proper documentation

The Tribunal allowed the appeal, overturning the denial of Cenvat credit for transportation and consultancy services. Emphasizing the significance of ... CENVAT Credit - duty paying documents - credit denied on the ground that no proper documents as prescribed under Rule 9 of the Cenvat Credit Rules 2004 was produced - Held that:- The invoice of the service provider is a prescribed document for the purpose of availing credit. It is not the case of the Revenue that the credit which has been claimed has been claimed without the strength of such an invoice. Neither in case of reverse charge it could be so. The payment of Service Tax on reverse charge could have been made only on the basis of the invoices issued by a service provider in case of service provided from outside and invoices issued by the said service provider abroad or in case of GTA services by the said GTA service provider. When these invoices were available for determination and payment of Service Tax on reverse charge basis, obviously these invoices are available with the appeals for claiming the credit also. The documents evidencing the payment of Service Tax in this case is the debit entry in the Cenvat Credit Account. These debit entries made in Cenvat Credit registers read along with invoices issued by the service provider would satisfy the requirements of Rule 9 of Cenvat Credit Rules - credit cannot be denied on this ground. CENVAT Credit - input services - outward freights - CBEC vide Circular No.97/8/2007-ST dated 23.08.2007 - Held that:- The issue decided in the case of COMMISSIONER OF CENTRAL EXCISE, BELGAUM VERSUS M/S. VASAVADATTA CEMENTS LTD. [2018 (3) TMI 993 - SUPREME COURT], where it was held that tax paid on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer, has to be allowed - credit allowed. Credit allowed - appeal allowed - decided in favor of appellant. Issues:1. Denial of Cenvat credit for inward and outward transportation services.2. Denial of credit for technical consultancy services.3. Interpretation of Rule 9 of the Cenvat Credit Rules 2004.Issue 1: Denial of Cenvat credit for transportation servicesThe appellants contested the denial of Cenvat credit for GTA services, technical consultancy services, and outward transportation of goods. The Counsel argued that the denial was based on the absence of prescribed documents under Rule 9 of the Cenvat Credit Rules. The Counsel cited relevant judgments supporting their claim, emphasizing that invoices from service providers are essential for availing credit. The Tribunal noted that the invoices, along with debit entries in the Cenvat Credit Account, fulfilled the Rule 9 requirements. The CBEC Circular further clarified that the consignee, regardless of who paid the service tax, could claim credit if eligible. Thus, the Tribunal held that credit for these services should be allowed.Issue 2: Denial of credit for technical consultancy servicesRegarding the denial of credit for technical consultancy services, the Counsel referenced a Supreme Court decision highlighting that the payment of Service Tax on reverse charge was erroneous pre-amendment. However, since credit was already availed, this issue was not pressed further. The Tribunal acknowledged this argument but focused on the availability of invoices and debit entries to support the credit claim, ultimately allowing the credit for technical consultancy services.Issue 3: Interpretation of Rule 9 of the Cenvat Credit Rules 2004The Tribunal analyzed Rule 9, emphasizing the importance of invoices as prescribed documents for availing Cenvat credit. The Rule outlines specific requirements for documents supporting credit claims, ensuring that all necessary particulars are included. The Tribunal's interpretation aligned with the Rule's provisions and previous CBEC Circulars, affirming that invoices and related documents are crucial for establishing credit eligibility. Additionally, the Tribunal referred to a Supreme Court judgment to support the admissibility of Cenvat credit, reinforcing the significance of proper documentation in claiming credits.In conclusion, the Tribunal allowed the appeal, overturning the Order-in-Appeal that denied Cenvat credit to the appellants. The judgment underscored the importance of complying with Rule 9 of the Cenvat Credit Rules and ensuring the availability of prescribed documents, particularly invoices, to support credit claims for various services, including transportation and consultancy services.