Supplementary invoice credit remains admissible absent evasion-based recovery proceedings against the service provider.

CENVAT credit on supplementary invoices remained admissible because the bar under Rule 9(1)(bb) applies only where the additional tax is recoverable from the service provider on grounds of fraud, suppression, wilful misstatement or similar evasion. No show-cause notice had been issued to the service provider and no adjudication had invoked the extended-recovery proviso under Section 73(1) of the Finance Act, 1994. The service tax had been paid after advice from the jurisdictional officer, and the cited service tax and point-of-taxation rules were held inapplicable to the recipient. Credit was therefore allowed and denial of credit was unsustainable.

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Issues: Whether CENVAT credit taken on the basis of supplementary invoices issued by the service provider was admissible when no show-cause notice or adjudication had been initiated against the service provider under the extended-recovery provision.

Analysis: Supplementary invoices are prescribed documents for availing credit under the CENVAT Credit Rules, 2004. The bar in Rule 9(1)(bb) applies only when the additional amount becomes recoverable from the service provider on account of non-levy, short-levy, non-payment, or short-payment by reason of fraud, collusion, wilful misstatement, suppression of facts, or similar contravention with intent to evade tax. On the record, no notice had been issued to the service provider and no adjudication had been made invoking the proviso to Section 73(1) of the Finance Act, 1994. The service tax had been paid by the service provider on being advised by the jurisdictional officer, and the departmental findings did not establish the conditions necessary to attract the credit restriction. The references to Rule 4A(1) of the Service Tax Rules, 1994 and Rule 3 of the Point of Taxation Rules were also held inapplicable to the service recipient.

Conclusion: The credit was admissible and the denial of CENVAT credit was unsustainable.

Final Conclusion: The impugned order was set aside and the appeal was allowed, with credit restored to the appellant.

Ratio Decidendi: Credit cannot be denied on supplementary invoices unless the department first establishes, by proceedings against the service provider, that the amount was recoverable for fraud, suppression, or similar evasion-based grounds.

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