2026 (3) TMI 103 - AT - Service Tax

Cenvat credit admissibility: self-contained e-statements treated as invoice-equivalent, allowing credit for banking transaction charges.

E-statements issued by the payments network were held to meet the documentary particulars required under the proviso to Rule 4A and Rule 9, allowing a ... Entitlement to avail cenvat credit on e-statements issued by National Payments Corporation of India (NPCI) for ATM/NFS transaction charges - taxable services under the category of ‘Banking and other Financial Services’ (BOFS) - application of proviso to Rule 4A of the Service Tax Rules, 1994. Admissibility of cenvat credit on electronic statements - HELD THAT: - The Tribunal examined whether the e-statements issued by NPCI satisfied the documentary requirements for availing cenvat credit by a banking company. It applied the proviso to Rule 4A of the Service Tax Rules, 1994, which relaxes certain formal requisites for invoices, bills or challans in the case of banking companies and financial institutions. The Tribunal noted that NPCI acts as an intermediary under agreements with member banks to provide switching, accounting and settlement services for ATM/card transactions, and that the e-statements were issued in that commercial and contractual context. On review of the material, the Tribunal found the e-statements to be self-contained and to incorporate the requisite particulars envisaged by the proviso to Rule 4A. The revenue had not pointed to any irregularity in NPCI's filings or returns that would cast doubt on the transactions recorded. The Tribunal further relied upon the earlier decision considered in the order [2019 (2) TMI 1383 - CESTAT CHENNAI], which treated similar NPCI statements as meeting the requirements for banking companies to claim credit. In these circumstances the Tribunal concluded that denial of credit on the ground that the e-statements were not authenticated or not invoices was unsustainable. [Paras 6, 7] The appellant was entitled to avail cenvat credit on the NPCI e-statements for April 2009 to March 2012; the impugned findings to the contrary were set aside. Final Conclusion: The impugned order was set aside and the appeal allowed; the appellant is entitled to the claimed cenvat credit for the period April 2009 to March 2012, with consequential relief as per law. Issues: Whether the appellant bank is entitled to avail cenvat credit on e-statements issued by National Payments Corporation of India (NPCI) for ATM/NFS transaction charges for the period April 2009 to March 2012.Analysis: The claim involves interpretation of documentary requirements for availing cenvat credit under Rule 9 of the CENVAT Credit Rules, 2004 read with Rule 4A of the Service Tax Rules, 1994, including the proviso to Rule 4A applicable to banking companies. The e-statements issued by NPCI were examined for whether they contained the requisite particulars contemplated by the proviso to Rule 4A and whether NPCI's role and the agreements between member banks rendered the e-statements functionally equivalent to invoices/bills/challans for the purposes of credit. The Tribunal applied the reasoning in the decision of Karur Vysya Bank Ltd. v. CCE&ST (CESTAT Chennai) holding that NPCI's statements, being self-contained and issued in the context of an agreement providing for NPCI to raise statements/invoices and account for settlements, satisfy the proviso to Rule 4A and Rule 9 requirements. The Tribunal also noted absence of any contrary compliance failure by NPCI (such as non-filing of returns) that would cast doubt on the transactions.Conclusion: The appellant is entitled to avail cenvat credit on the e-statements issued by NPCI for the period April 2009 to March 2012; the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.