AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 693
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.... Dukaan Financial Services (hereinafter referred to as 'other party'); that the debit note was consequent to a subsequent agreement entered into by the appellant with the other party; that the Assistant Commissioner issued Show Cause Notice dated 14.08.2019 on the ground that the said debit note was not a valid document as per Rule 9 of the CENVAT Credit Rules, 2004 (hereinafter referred to as "CCR, 2004") and that consequently, the CENVAT Credit availed was ineligible credit in terms of Rule 9 ibid.; that in the above Show Cause Notice, it was proposed that a sum of Rs.10,44,365/- could not be taken into account and therefore, the refund claim to the above extent would be rejected. 3.1 The appellant filed a detailed reply wherein it had placed reliance on various judicial pronouncements, but however, vide Order-in-Original No. 50/2019-R dated 04.12.2019, the Adjudicating Authority rejected the proposed amount while sanctioning the balance claim of refund. Aggrieved by the said order, the appellant preferred an appeal before the Commissioner of G.S.T. and Central Excise (Appeals-I), Chennai. The First Appellate Authority, after hearing the appellant, felt it proper to remand the....
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....was held that the same were factually distinguishable. 4. Aggrieved by the rejection of its appeal by the First Appellate Authority, the appellant has filed the present appeal before this forum. 5. Learned Chartered Accountant for the appellant would submit, in short, that:- (i) The impugned order has travelled beyond the Show Cause Notice. (ii) The eligibility of credit could not be questioned at the time of sanctioning the refund. (iii) The eligibility of credit could not be questioned in the hands of the service recipient once the Service Tax paid by the service provider is accepted by the Revenue. (iv) The agreement/arrangement between the appellant and the other party is in the nature of cross-charge / shared business services and hence, the credit should not have been denied. 6.1 Per contra, Learned Additional Commissioner for the Revenue would submit that the allegation as to the impugned order having travelled beyond the Show Cause Notice was not correct since the very proposal in the Show Cause Notice itself was the ineligibility of the debit note in terms of Rule 9 ibid. She would clarify that there was violation of Rule 9 sinc....
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.....2019 issued by the Assistant Commissioner inter alia proposed for the rejection of partial amount of Rs.10,47,890/- touching the very Rule 9 of the CCR, 2004 on the ground that the debit note was not recognized under the Rule ibid. 8. The issue in dispute concerns the allowability of the claim for CENVAT credit, being the alleged input tax in respect of the debit note of 31.03.2017. 9.1 The Adjudicating Authority rejected the claim in respect of this amount. In first appeal, the first appellate authority reached the following findings:- (a) From a reading of Rule 9 of the CCR, 2004, the debit note is not a valid document for taking CENVAT Credit. (b) The Hon'ble High Courts of Telangana and Rajasthan and the CESTAT Benches of New Delhi and Bangalore have held that when the debit note discloses all essential particulars of a statutory invoice, CENVAT Credit could not be denied. (c) The appellant had claimed that the Adjudicating Authority had not considered the supporting documents, as extracted in the table at paragraph 7 (page 4) of the Order-in-Appeal No. 31/2020 (CTA-I) dated 21.02.2020. (d) There was no finding in the impugned order re....
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....i) Do the judgement in the case of M/s. Modular Auto Ltd. (supra) and the order in M/s. Gates Unitta India Co. Pvt. Ltd. (supra) cover the case at hand?; (ii) Did the Order-in-Original traverse beyond the Show Cause Notice?; (iii) Was there any violation of Rule 9 of the CCR, 2004 so as to disentitle the Appellant to its claim for input tax credit in respect of the debit note?; (iv) Is the Appellant otherwise entitled to such credit? 13. I take up these issues in seriatim. 14.1 The first issue is whether the judgement in the case of M/s. Modular Auto Ltd. (supra) and the order in M/s. Gates Unitta India Co. Pvt. Ltd. (supra) cover the case at hand. 14.2 The facts in M/s. Modular Auto Ltd. (supra) (as noted in paragraphs 4 and 5 of the judgement) may be appreciated. BSNL and Reliance Communications Ltd. rendered Multi-protocol Label Switching (MPLS) services to BIL, a company for whom the assessee was a job worker. BIL used these services for communicating with and retrieving data from its job workers such as the assessee therein. BIL raised tax invoices on the assessee therein (M/s. Modular Auto Ltd.) seeking that it be reimbursed for the amounts....
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....the last (fourth) issue. 14.6 Now this Tribunal's order in M/s. Gates Unitta India Co. Pvt. Ltd. (supra). In that case, a Division Bench of this Tribunal held at paragraph 5 that CENVAT credit cannot be denied when the credit is availed on debit notes if such note contains all the mandatory particulars as prescribed in the Service Tax Rules. It followed this Tribunal's decision in M/s. Shree Cement Ltd. V. CCE [2013 (29) S.T.R. 77 (Tribunal - Delhi)] and also relied on the decisions in Commissioner v. M/s. Bharati Hexacom Ltd. [2018 (12) GST 123 (Raj.)] and M/s. Gabriel India Ltd. v. Commissioner [2017 (48) S.T.R. 492 (Tribunal - Delhi)]. 14.7 The Bench in M/s. Gates Unitta India (supra) then followed the judgement in M/s. Modular Auto Ltd. (supra) to hold that the sum is not merely a reimbursement so as to pass on the cost incurred. 14.8 Therefore, while M/s. Gates Unitta India (supra) has, undoubtedly held that credit can be availed on the basis of debit notes, again, in that case, no dispute was raised as to whether services were rendered at all. Neither M/s. Gates Unitta India (supra) nor M/s. Modular Auto Ltd. (supra) does away with the requirement that services must ....
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.... accounted for in the books of the account of the receiver, he may allow the CENVAT credit." 16.2 It is thus clear that the document in the case on hand, i.e., the debit note, should contain inter alia the details of Service Tax payable, taxable service, etc., but here, as rightly pointed out by the Learned Departmental Representative, in the 'Particulars' column, it is mentioned as "being reimbursement of expenses incurred on behalf of A&A Dukaan Insurance Web Aggregator Private Limited". A perusal of Annexure-3, which is the so-called debit note, which is placed on record, reveals that it does not contain the nature of taxable service per se provided by the other party to the appellant, which is the condition precedent in terms of the proviso to Rule 9(2) ibid. Hence, I am of the view that in the present scenario, the debit note, which is incomplete, cannot be considered as a document specified in Rule 9 ibid. 17.1 The fourth issue is whether the Appellant is otherwise entitled to credit. From the facts, it is seen that the debit note is alleged to have been raised on 31.03.2017. However, in the original return filed on 23.08.2017, there is no reference to this debit note. ....