Input service credit cannot be denied under Rule 9(1)(b) for alleged suppression by the service provider.

Rule 9(1)(b) of the Cenvat Credit Rules applies to supplementary invoices issued by a manufacturer or importer for additional excise duty or customs duty, and it does not extend to additional service tax on input services. Credit to the recipient could not therefore be denied merely because the service provider was alleged to have suppressed facts. The demand was held unsustainable and disallowance of credit was set aside in favour of the assessee.

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Issues: Whether credit could be denied to the recipient of input service by invoking Rule 9(1)(b) of the Cenvat Credit Rules on the basis of additional tax recovered from the input service provider and an allegation of suppression against that provider.

Analysis: Rule 9(1)(b) governs supplementary invoices issued by a manufacturer or importer of inputs or capital goods in relation to additional excise duty or additional duty leviable under Section 3 of the Customs Act. It does not refer to additional service tax. The provision therefore could not be extended to cover the present case involving input service credit, and the credit could not be disallowed merely because the service provider had faced an allegation of suppression.

Conclusion: The demand was not sustainable and the disallowance of credit was set aside in favour of the assessee.

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