TaxTMI 
TaxTMI 
2024 (11) TMI 991
X X X X Extracts X X X X
X X X X Extracts X X X X
....books of account including billing system? b. Whether the demand of service tax of Rs.1,50,829 on the basis of reconciliation of income with the books of account vis-à-vis ST-3 returns during the year 2008-09 was sustainable? c. Whether there was a totalling mistake while arriving at the value for payment of service tax on "Test, inspection and certification services" and short payment of service tax of Rs.67,190/-? d. Whether demand of service tax of Rs.2,02,902 is recoverable from the Appellant on the basis of debit notes issued to M/s. Wockhardt Ltd for Rs.7,77,600/- and Rs.8,64,000/- and recovered service tax of Rs.96,111/- and Rs.1,06,791/- but could not provide the proof of payment to Government Exchequer? e. Whether larger period of limitation can be invoked in a case where there was no any wilful misstatement, suppression or mala fide intention to evade service tax? 1.1 The Learned Commissioner (Appeals) in the impugned order upheld the demand for the reasoning given below:- (i) The Ld. Commissioner (Appeals) denied CENVAT credit of Rs.10,25,059/- related to the expenses incurred at the branch offices mainly on the prem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ax and inadmissible Cenvat credit would have been undetected. Being aggrieved by the above Order-In-Appeal, the present appeal filed by the appellant. 2. Shri Hardik P Modh Learned Counsel appearing on behalf of the appellant submits that as regards the issue No. (i), wherein the Cenvat Credit of Rs. 10,25,059/- was denied. He submits that the Appellant undertakes the services of the 'Technical Testing & Analysis Service' from the branches that are performed on the blood samples of the Volunteers obtained during the human trials. The IP molecule which is administered to the Volunteers is sometimes mixed with ancillary products. Study of the samples are sent to the Ahmedabad office from where final report is prepared. The Appellant incurred expenses for supply of crates and contains as well as security services at the branches for which the payment is made from the Ahmedabad office. Since the Appellant did not provide any taxable services from the branches, they did not take registration. The Appellant is having centralized billing system and maintaining centralized accounts. Hence, the Appellant availed CENVAT credit of branches at the Ahmedabad office. In support he placed r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssuance of the debit notes in the month of July 2008. The Appellant received money subsequently from M/s. Wockhardt Ltd and therefore, they deposited service tax with the department at the time of receipt of money. It is to be noted that the issue of calculation of service tax on accrual basis for the period prior to 01.04.2011 is not legally sustainable as the Point of Taxation Rules, 2011 came into effect on 01.04.2011. 2.4 As regards the issue No. (v), i.e. whether the demand is time barred or otherwise, he submits that the disputed period involved in the appeal is of 2008-09 and the show cause notice has been issued on 22.10.2013 and therefore, the entire demand is barred by limitation. He submitted that the demand of extended period is not sustainable as no suppression of fact or mala fide exist on the part of the Appellant. In this regard, the Department has invoked the extended period alleging suppression of facts, for the reason that the taxable services were not disclosed in the service tax returns. It is submitted that the Appellant obtained service tax registration and the department had conducted various audit from the date of registration. There is no iota of eviden....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e purpose of availment of Cenvat credit registration is not prerequisite. The only criteria to allow the Cenvat credit on any input service is that the service should be used in or in relation to output service. The service should be tax paid. These criteria is not under dispute. The appellant have centralised accounting at Ahmedabad only. Therefore, even though the part of the activity are carried at different places but for all the activities of different places, the accounting is done at Ahmedabad office only. Therefore, in our considered view there seems to be no reason to deny the Cenvat credit. This issue has been considered by this Tribunal in the case of Manipal Advertising Services Pvt Ltd (supra), wherein the Tribunal held that if a person is discharging service tax liabilities from his registered premises, the benefits of Cenvat Credit on the service tax paid by the service providers cannot be denied to the assesse only on the ground that the said services are in the name of branch offices. There is no dispute that the branch offices are not registered with the Service Tax Authorities and they are not discharging service tax liabilities. The relevant para of the said Tri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hether the invoices on which Cenvat credit was availed were proper invoices in terms of Rule 4A of the 1994 Rules read with Rule 9 of the 2004 Rules. (ii) Whether the Appellant is entitled to avail Cenvat credit on the strength of invoices/bills issued to their office which is unregistered; and (iii) Whether the Appellant was required to obtain Central Excise Registration or ISD Registration for availing Cenvat credit on the invoices issued on a different address. 8. The Commissioner has held that the Appellant was not eligible to avail the Cenvat credit on the basis of invoices for two reasons. The first is that most of the invoices raised on the registered premises on the strength of which the Appellant had availed the Cenvat credit were not addressed to the Appellant or the said invoices were not in accordance with the conditions as laid down in 1994 Rules and the 2004 Rules. The second is that the Appellant did not have a centralized service tax registration for different offices nor it was registered as input service distributor. Thus, as the Appellant was not eligible to avail the Cenvat credit in respect of invoices not addressed to the registered ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r service tax payable, description of the goods or taxable service, assessable value, Central Excise or Service Tax registration number of the person issuing the invoice, as the case may be, name and address of the factory or warehouse or premises of first or second stage dealers or provider of taxable service, and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or service covered by the said document have been received and accounted for in the books of account of the receiver, he may allow the Cenvat credit." 11. In regard to the office situated at B5/116 Safdarjung Enclave, New Delhi, which is registered with the Service Tax Department, the Commissioner observed as follow : "From the certificate (issued by the M/s. Bhasin & Co., Chartered Accountant) and supporting documents submitted by the Noticee, I find that Cenvat credit availed by the Noticee on the basis of invoice/letter/debit note lack vital details and are not proper documents required for availing the Cenvat credit. The noticee in support of above certificate was not able to submit even a single proper invoice. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ir different offices or they are required to registered as input service distributor for availing the Cenvat credit on the invoices issued on the different address of the Noticee." 14. The Commissioner held that invoices should contain the address registered with the Service Tax Department and the findings are : "Here it is pertinent to mention that Rule 4A of Service Tax Rules, 1994 speaks about invoices, bills and challans to be issued by the service provider. It states that invoices, bills and challans shall be serially numbered and shall contain the following, namely-(i) the name, address and the registration number of such person; (ii) the name and address of the person receiving taxable service; (iii) description and value of taxable service provided or agreed to be provided; and (iv) the service tax payable thereon. Further, sub-rule (2) of Rule 9 of Cenvat Credit Rules, 2004 states that no Cenvat credit under sub-rule (1) shall be taken unless all the particulars as prescribed under the Central Excise Rules, 2002 or the Service Tax Rules, 1994, as the case may be, are contained in the said document. The proviso to this Rule states that if the said document....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich prescribed that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the three authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law. Therefore, said finding recorded by the Tribunal as well as by the lower authorities cannot be sustained. Accordingly, it is set aside". 17. A Division Bench of the Tribunal in Adbur Private Limited also observed as follows : "9. Regarding denial of Cenvat credit on the ground that the invoices were addressed to unregistered premises of the appellant, we note that there is no dispute regarding eligibility of input service for availability of credit to the appellant. The denial of credit is only with reference to address in the document. We find in various decisions, this Tribunal held that the credit cannot be denied on this reason. Reference can be made to the decision in Manipal Advertising Services Pvt. Ltd. (supra). We also note that in the appellant's own case on the same issue, the Original Authority for the later period held that denial of credit cannot be justified on this ground, vide or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of service if any performed. Therefore, on this ground itself, the demand of Rs. 1,50,829/- is not sustainable. Further we find that the appellant have provided the reconciliation statement, according to which the appellant paid service tax on the excess amount coming after the reconciliation. Therefore, there is no short payment of service tax. We have perused the reconciliation statement as Annexed-2 of the appeal memo. Accordingly, on this count also demand is not sustainable. 5.1 In this regard we place reliance on the decision in the case of Chartered Logistics Ltd (supra), dealing with the situation where there is a demand on difference of value shown in books of accounts and ST-3 return. The relevant part of the judgement are reproduced below:- "5.5 We also find that absolutely no proper inquiry has been made by the department with the Appellant as regard the disputed difference. No statement in this regard asking them about the income declared to the income tax authorities has been recorded. No evidence was produced by the department to show that the amounts declared by the appellant before the income tax authorities are pertaining to the taxable services. In ab....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....2013. Hence, the entire demand is under extended period. In this regard we find that the appellant obtained service tax registration and the department had conducted various audits from the date of registration. The entire data on the basis of which the service tax demand was raised in the present case were retrieved from the existing books of accounts of the appellant. Therefore, there is no suppression of fact or any mala fide intention with intend to evade payment of duty on the part of the appellant. Therefore, in the facts of the present case I also hold that the demand is not sustainable on the ground of limitation also. On the point of limitation, the following judgments supports the case of the appellant:- a). In the case of Pahwa Chemicals Pvt. Ltd (supra) the Hon'ble Apex Court has held that mere failure to declare does not amount to wilful mis-declaration or wilful suppression and there must be some positive act on the part of the party to establish either wilful mis-declaration or wilful suppression. The Apex Court further held that when the facts are before the department and the party is in the belief that affixing of label makes no difference, does not make....