The Custom, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi Bench has held that cenvat credit cannot be denied due to incorrect address on invoices.
The tribunal ruled that the deficiency noticed in the invoices is held to not be enough to deny the benefit of Cenvat credit in view of the proviso to Rule 9(2) of the Credit Rules. The invoices on record have all such details as mentioned above. However, the invoices with incorrect address issued by the input service providers contain all the requisite particulars as required under the proviso to Rule 9(2), therefore, Cenvat credit cannot be denied to the appellant. In fact, Rule 9(2) nowhere requires mentioning the address of service recipient. The proviso to Rule 9(2) of Credit Rules kicks in only when the conditions under Rule 4A of Service Tax Rules, 1944 read with Rule 9 of the Credit Rules, are not fulfilled entirely.
The tribunal stated that in the absence of any evidence from department that the units mentioned in the invoices are the service recipient or that those units have accounted those invoices in their account or that any other unit than appellant’s name in the invoices based whereupon appellant has availed Cenvat credit is nothing but a procedural lapse, substantial benefit cannot be denied. The procedure is the hand maiden to justice. It should never be made a tool to deny justice or to perpetrate injustice.
Facts
The appellant/assessee was holding Central Excise registration being engaged in the manufacture of Bearing, Bearing Components, Machines and was also holding service tax registration for providing the services as Business Auxiliary Service, Consulting Engineering Service, etc. During the course of audit and verification of Cenvat records of input services maintained by the appellant, it was observed that they have wrongly availed Cenvat credit of input service on the basis of invoices which are not prescribed documents as per Rule 4(7) and 9 of Cenvat Credit Rule, 2004. In view of the above facts, it also appeared to the department that above discrepancies have come to notice during the audit else the facts might not have come to knowledge of the department.
Thus the appellant is alleged to have suppressed the facts from the department with intent to evade payment of Central Excise duty. Therefore, wrongly taken Cenvat credit of Rs.12,62,017- on input services was proposed to be recovered with proportionate interest and appropriate penalties vide Show Cause Notice No. 2152 dated 04.11.2019. The proposal has been confirmed vide Order-in-Original No. 01/2021-22 date 30.06.2021. The appeal against the order is dismissed vide Order-in-Appeal No. 15/2023 dated 14.03.2023.
Arguments
The appellant contended that the invoices issued by the service providers contain all the details as specified under Rule 9(1)(f) of the Credit Rules, read with Rule 4A(1) of the Service Tax Rules. The only objection raised in the show cause notice and endorsed by both the lower authorities below, is that the invoices do not contain the correct address of the Appellant and thus, these invoices fail to satisfy the requirement of Rule 4A(1) of the Service Tax Rules. In this regard, it is submitted by the learned counsel that no dispute has been raised in the present proceedings regarding receipt of eligible input services as well as tax paid on such services. Once there is no dispute on usage of said input services in or in relation to manufacture of final product cleared by the appellant as well as tax paid, substantive benefit of Cenvat credit provided in Rule 3 of the Cenvat Credit Rules, 2004 (CCR, 2004) cannot be denied by resorting to procedural requirements under Rule 4A of the Service Tax Rules, with Rule 9 of the Credit Rules.
Conclusion
The appeal of the assessee was allowed and the tribunal held that the invoices submitted by the appellant pertain to the subject matter at hand and the demand of Cenvat credit is not sustainable. Rejection of these documents in the impugned proceedings is without appreciating the correct facts and thus, liable to be discarded.
Case Details
Case Name: M/s. National Engineering Industries Limited v/s Commissioner of CGST & Central Excise, Jaipur
Citation: Excise Appeal No. 55041 of 2023 [SM]
Coram: Dr. Rachna Gupta, Member (Judicial)
Tribunal: CESTAT, New Delhi