Tribunal overturns disallowance of CENVAT Credit on supplementary invoices, clarifies obligations on timely issuance.
M/s. Usha Martin Limited Versus Commissioner of Central Excise & Service Tax, Jamshedpur
M/s. Usha Martin Limited Versus Commissioner of Central Excise & Service Tax, Jamshedpur - TMI
Issues involved:The issues involved in the judgment are disallowance of CENVAT Credit on supplementary invoices, imposition of penalty, and the applicability of Rule 4A(1) of the Service Tax Rules 1994 and Rule 9(2) of the CENVAT Credit Rules 2004.
Disallowed CENVAT Credit on Supplementary Invoices:The appeal was filed against the disallowance of CENVAT Credit by the Commissioner on supplementary invoices issued by an unregistered service provider after getting registered. The Commissioner disallowed the credit citing violation of Rule 4A(1) of the Service Tax Rules 1994 and Rule 9(2) of the CENVAT Credit Rules 2004. The Commissioner also imposed a penalty under Section 11AC of the Central Excise Act, 1944, alleging willful intention to evade payment of excise duty. The appellant argued that the obligation to issue invoices timely rests on the service provider, not the recipient, and relied on relevant case laws supporting their position. The Tribunal held in favor of the appellant, citing precedents and ruled that the credit cannot be disallowed based on the delayed issuance of invoices by the service provider.
Validity of Supplementary Invoices for CENVAT Credit:The issue of whether supplementary invoices qualify as specified documents for availing CENVAT Credit under Rule 9(1)(f) of the CENVAT Credit Rules 2004 was also addressed. The Tribunal referred to a previous decision and concluded that during the relevant period, there was no distinction between an 'invoice' and a 'supplementary invoice' for availing credit. The Tribunal further emphasized that there was no restriction on availing CENVAT Credit during the disputed period, even if the tax paid was due to deliberate evasion by the service provider. Citing relevant case laws, the Tribunal held that the impugned order disallowing the credit and imposing penalties was not sustainable, setting it aside and allowing the appeal with consequential relief.
Conclusion:The Tribunal ruled in favor of the appellant, setting aside the disallowance of CENVAT Credit on supplementary invoices and the imposed penalty. The judgment highlighted the distinction between the obligations of the service provider and the service recipient regarding timely issuance of invoices. Additionally, it clarified the admissibility of CENVAT Credit on supplementary invoices during the disputed period, emphasizing the absence of restrictions on such credit. The decision was based on legal precedents and interpretations of relevant rules and regulations, providing relief to the appellant in this case.