Appellant wins CENVAT credit appeal after authorities wrongly rejected service tax credit under Rule 4A

CESTAT Bangalore allowed appellant's appeal regarding denied CENVAT credit of service tax. The appellant had availed credit based on Input Service Distributor bill from Head Office, which authorities rejected claiming it lacked requisite particulars under Rule 4A of Service Tax Rules, 1994. CESTAT held that appellant produced challan evidencing service tax payment by Head Office and invoice from Head Office, complying with CENVAT Credit Rules, 2004 provisions. The adjudication authority's findings on registration requirements were factually incorrect. The impugned order was set aside, making appellant eligible for the CENVAT credit.

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Issues:
Denial of cenvat credit based on Input Service Distributor bill lacking requisite particulars under Rule 4A of Service Tax Rules, 1994.

Analysis:
The appellant availed cenvat credit of service tax using Input Service Distributor bill from M/s. Federal Mogul Goetze (India) Ltd. A show-cause notice alleged non-compliance with Rule 4A, leading to recovery of irregular credit with interest and penalty. The appellate authority upheld this decision, prompting the present appeal.

During the hearing, the appellant's counsel highlighted the show-cause notice's allegations of contravention of Rule 9(2) of Cenvat Credit Rules, 2004. The adjudication authority rejected the claim citing non-compliance with Rule 4A(2) requirements for the bill issued by the Input Service Distributor.

The counsel argued that the invoice and challan produced contained necessary particulars as per Rule 9(e) & (f), indicating compliance with Cenvat Credit Rules, 2004. They refuted the adjudication authority's claim of registration discrepancy by presenting evidence of the appellant's registration since 21.03.2005, not 09.09.2008 as held.

Citing a Tribunal decision in Lokesh Machines Ltd. Vs. CCE, Hyderabad-I, the counsel emphasized proper accounting of credit despite minor invoice particulars issues. The AR supported the adjudication authority's findings, contending non-compliance with legal provisions.

The Tribunal, considering Rule 9(2) requirements, found the appellant's compliance through the challan and invoice from the Head Office. Dismissing the adjudication/appellate authority's factual inaccuracies, the Tribunal allowed the appeal, granting consequential relief as per the law.

In conclusion, the impugned order was set aside, and the appeal was allowed with consequential relief, if any, in accordance with the law. The operative part of the order was pronounced in open court on 06.06.2024.

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