2022 (11) TMI 693 - AT - Service Tax
Refund of excess service tax paid - CENVAT Credit - Debit Note - Duty paying document - valid document as per Rule 9 of the CENVAT Credit Rules, 2004 or not - whether the judgement in the case of M/s. Modular Auto Ltd. [2018 (8) TMI 1691 - MADRAS HIGH COURT] and the order in M/s. Gates Unitta India Co. Pvt. Ltd. [2021 (9) TMI 688 - CESTAT CHENNAI] cover the case at hand? - HELD THAT:- The facts in M/s. Modular Auto Ltd. 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 paid by it to BSNL and Reliance Communication - the facts of the present case are clearly distinguishable from those before the Hon’ble High Court. In M/s. Modular Auto’s case, there was no dispute that the service provider had been assessed to tax in respect of the services in question. In the present case, beyond the debit note, which, particularly concerning the Appellant and the other party, which are related parties, can be treated as a self-serving document, there is no evidence on the record to demonstrate that the relevant amounts had been offered to tax in the hands of the other party. There are also clear findings to this effect by both the lower authorities. Further, in M/s. Modular Auto’s case, the document raised by BIL was a tax invoice. Therefore, the Hon’ble High Court was never called upon to consider the question of whether input tax credit could be claimed on the basis of a debit note.
This Tribunal’s order in M/s. Gates Unitta India Co. Pvt. Ltd. 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 - while M/s. Gates Unitta India 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 nor M/s. Modular Auto Ltd. does away with the requirement that services must be rendered to the assessee so that the assessee may claim input tax credit.
These two decisions do not directly cover the case in hand.
Whether the Order-in-Original traverses beyond the Show Cause Notice? - HELD THAT:- The very foundation, as could be seen from the Show Cause Notice, was the satisfaction of Rule 9 ibid. When a claim for refund is made, it is but natural for the authorities to meticulously examine such claim and compliance of the claim with the statutory requirements because their primary duty is to safeguard the interest of the Revenue. Hence, while examining such claims, the authorities below here, in this case, have explored the available options in the context of the requirements of Rule 9 ibid - the final conclusion by the lower authorities are concurrent inasmuch as they have only held that there has been violation of Rule 9, i.e., the document relied upon by the claimant is not one prescribed under the said Rule - no finding of the lower authorities has gone beyond the Show Cause Notice.
Whether there was any violation of Rule 9 of the CCR, 2004? - HELD 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, in the present scenario, the debit note, which is incomplete, cannot be considered as a document specified in Rule 9 ibid.
Whether the Appellant is otherwise entitled to credit? - HELD THAT:- 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. It finds mention for the first time in the Appellant’s revised return of 08.09.2017. The debit note is said to find its strength from an agreement dated 14.09.2017, drawn up with retrospective effect after both the returns were filed. This state of the facts does not inspire confidence as to the legitimacy of the debit note, and also as to whether the debit note in fact existed on 31.03.2017 at all - There are concurrent findings of the authorities below that the debit note was not reflected in the returns filed by the other party. The Appellant and the other party are, admittedly, related parties. Also, no rental agreement between the Appellant and the other party is placed.
The preponderance of probability is that the debit note is a self-serving document which was not executed (as it purports to have been) on 31.03.2017. No material is placed on record to dislodge the concurrent findings of the lower authorities that the other party did not, in fact, render any services to the Appellant, and therefore the requirements of Rule 3 of the CCR, 2004 have not been met.
There are no reasons to interfere with the findings in the impugned order, for which reason the appeal stands dismissed.