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of <h1>Cenvat Credit entitlement where service tax paid by recipient: GAR-7 challan accepted if contains invoice particulars; denial set aside.</h1> Decision addresses entitlement to cenvat credit where service tax was paid by the recipient and denial based on use of a GAR-7 challan. The tribunal ... Cenvat Credit entitlement where service tax has been paid by the recipient - Limitation and extended period of demand in tax proceedings - Documentary requirements for availing Cenvat Credit - manufacture of excisable goods namely Duplex Paper - HELD THAT:- The Adjudicating Authorities have denied availment of cenvat credit also for the reason that same has been availed based on GAR-7 Challan. Apparently GAR-7 Challan is not the document mentioned in Rule 9 of the Cenvat Credit Rules, 2004, based whereupon Cenvat Credit can be availed. However, in terms of proviso to Rule 9(2) of the Rules, any other document, if suffice for all the contents of invoice, can entitle the tax payee to avail the Cenvat Credit. GAR-7 Challan is not on record and it is not the case of the department that said challan does not contain the complete particulars as are required under Rule 9 of the Rules. Hence, refrain to hold that the GAR -7 Challan was ineligible document for availing Cenvat Credit. Support is drawn from the decision of Riya Travels & Tours [2018 (11) TMI 1804 - CESTAT MUMBAI] as is referred on behalf of the appellant. Hence it is held that the order denying availment of cenvat credit and utilization thereof by the appellant/ taxpayee, even for the normal period is not sustainable. I do not find any loss to the government exchequer nor any irregularity in the modus operandi adopted by the appellant. Hence the order under challenge is hereby set aside and appeal is hereby ordered to be allowed. Issues: (i) Whether the show cause notice proposing denial of Cenvat credit for the period April 2016 to March 2017 was barred by limitation; (ii) Whether, on merits, Cenvat credit can be denied where the recipient paid service tax on Business Auxiliary Service and availed credit based on GAR-7 challan/instruments.Issue (i): Whether the demand in the show cause notice is time-barred.Analysis: The appellant filed regular returns declaring the transactions and payment; no suppression, misrepresentation or fraud is alleged or proved. The extended period applies only where suppression/misrepresentation/fraud is shown. The limitation period was extended to two years from 14 May 2016, rendering demands from May 2016 onwards within limitation; only April 2016 falls outside the normal period.Conclusion: The demand for April 2016 is time-barred and is set aside; demands for the period from May 2016 onwards are within limitation.Issue (ii): Whether the appellant was entitled to avail Cenvat credit on service tax paid as recipient and whether GAR-7 challan/instrument sufficed for availing credit.Analysis: The appellant paid the full service tax on commission though Business Auxiliary Service was not covered under the reverse charge notification. Under the Cenvat Credit Rules, entitlement to credit arises for the person who pays the service tax. The invoices produced did not show tax charged by the provider, but the appellant paid tax and GAR-7 challan was relied upon for credit. Rule 9 prescribes invoice particulars, but the proviso to Rule 9(2) permits other documents that suffice for all required invoice contents; the record does not show that GAR-7 lacked required particulars. No loss to the exchequer is shown.Conclusion: The appellant is entitled to avail and utilize the Cenvat credit for the normal period (May 2016 to March 2017); denial of credit for that period is set aside.Final Conclusion: The impugned order is set aside and the appeal is allowed in part by setting aside the demand for April 2016 on limitation grounds and allowing Cenvat credit for the period May 2016 to March 2017 on merits.Ratio Decidendi: Where a tax recipient has paid the service tax, he is entitled to avail Cenvat credit of the tax paid; extended limitation period is invokable only upon proof of suppression, misrepresentation or fraud, and documents other than invoices may suffice for credit if they contain all particulars required by Rule 9(2) of the Cenvat Credit Rules, 2004.
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