TMI Blog2021 (2) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... vice. After noting this submission, the Tribunal while remanding the matter to the Original Authority following the decision in Pharmalab Process Equipments Pvt., Ltd. [ 2009 (4) TMI 142 - CESTAT AHMEDABAD ], where it was held that debit notes issued by service providers contained details of service tax payable, description of taxable service, value of taxable service and registration number of service provider and name and address of service provider, which are the details required as per Rule 9(2) of the CCR, 2004 , issued one more direction to the Original Authority to issue a fresh show cause notice as to whether the impugned services are eligible input services or not. The assessee is aggrieved over such direction. Experts explain Debit notes to be a form of proof that one business has created a legitimate debit entry in the course of dealing with another business. This might occur when a purchaser returns materials to a supplier and needs to validate the reimbursed amount. In this case, the purchaser issues a debit note reflecting the accounting transaction. Debit notes and credit notes are almost always involved in business-to-business (B2B) transactions. They ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant/assessee as to whether the impugned services are eligible input services or not is wholly without jurisdiction and the same is liable to be set aside - appeal allowed - decided in favor of appellant. - C.M.A.Nos.2200 to 2202 of 2010 And M.P.Nos.1, 2 & 2 of 2010 - - - Dated:- 11-2-2021 - Honourable Mr. Justice T.S. Sivagnanam And Honourable Ms. Justice R.N. Manjula For the Appellant : Mr.S.Manoj For the Respondent : Mr.A.P.Srinivas, Senior Standing Counsel JUDGMENT T.S.SIVAGNANAM, J. These appeals have been filed by the appellant/assessee under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as the Act ) challenging the order dated 18.12.2009, passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai (for brevity the Tribunal ) in Final Order Nos.2 to 4 of 2010 respectively. 2.The appeals were admitted, on 18.03.2011, on the following substantial questions of law:- 1.Whether in the facts and circumstances of the case, the Tribunal was correct in law in travelling beyond the Show Cause Notice and remanding the matter for fresh adjudication on a ground which was never raised by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CCR, 2004, inasmuch as they have wrongly availed service tax input credit based on ineligible documents, that is, debit notes issued by their service providers and utilized the said credit towards payment of duty and thereby rendering themselves liable for penal action under Rule 14 and Rule 15 of the CCR, 2004. 5.2.The show cause notice further states that under Rule 9(1) of the CCR, 2004, CENVAT/service tax credit can be taken by the manufacturer or provider of output service or input service distributor based on the following documents, viz., (i) an invoice; (ii) a supplementary invoice; (iii) a bill of entry; (iv) a certificate issued by an Appraiser of Customs in respect of goods imported through Foreign Post Office; (v) a challan; (vi) an invoice, bill or challan issued by an input service distributor under Rule 4A of the Service Tax Rules, 1994 (hereinafter referred to as the STR, 1994 ); and (vii) an invoice, bill or challan issued by an output service distributor under Rule 4A of the STR, 1994. 5.3.The show cause notice further states that Rule 9(1) of the CCR, 2004 does not prescribe debit note as a document on the basis of which CENVAT/service tax credit can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /invoice is raised indicating details of the provider, receiver, services rendered and the amount due from the service receivers and hence, debit note cannot be equated with bill/invoice, since it is not one of the specified documents under Rule 9 of the CCR, 2004 and consequently, no CENVAT credit is available based on debit notes. Aggrieved by such order, the assessee preferred appeal to the Tribunal. 8.The Tribunal agreed with the assessee, after taking note of the decision of the Tribunal in the case of Pharmalab Process Equipments Pvt., Ltd., vs. CCE, Ahmedabad [2009 (16) STR 94], wherein it was held that debit notes issued by service providers contained details of service tax payable, description of taxable service, value of taxable service and registration number of service provider and name and address of service provider, which are the details required as per Rule 9(2) of the CCR, 2004. After recording such a finding, the Tribunal remanded the matter to the Original Authority for verifying the document, which contains the necessary details and allow the benefit of service tax credit on such verification. 9.The assessee is not aggrieved by such order of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar to an invoice. The main difference is that invoices always show a sale, where debit notes and debit receipts reflect adjustments or returns on transactions that have already taken place. B2B transactions are typically based on an extension of credit, where a vendor sends a shipment to a company before getting paid, then invoices the company for the amount owed after delivery. Debits and credits are the accounting method used to keep track of these transactions. Debit notes can also be substituted for traditional invoices when a good or service is provided that is outside of the normal scope of business. This helps distinguish the transaction for both accounting departments, and also keeps the issuing company from creating a new type of invoice. (https://www.investopedia.com) 11.The endeavour before us by the Revenue to sustain the argument is by referring to the powers of the Tribunal and that the Tribunal would be entitled to examine all issues, when it seized of an appeal arising out of an order in original or an order in appeal. This submission is not well founded in the facts and circumstances of this case for more than one reason. Firstly, the appeal was filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be taken as the basis for assessing appellants' sales to Syndet in Uttar Pradesh. This finding of the appellate Tribunal is based on first proviso to Section 4(1(a) of the Act. While the show cause notice and the order of the Collector proceeded on the basis of the invocation of third proviso to Section 4(1)(a) of the Act, the appellate Tribunal for the first time in the impugned order has sustained the proceedings on the basis of first proviso to Section 4(1)(a) of the Act. It was argued that the first proviso to Section 4(1)(a) of the Act was never invoked by the Department either in the show cause notice or in the impugned order and it was for the first time that the appellate Tribunal in the impugned order has sought to sustain the impugned order by invoking the first proviso to Section 4(1)(a) of the Act. It is thus seen that the Tribunal has gone totally beyond the show cause notice and the order of the Collector, which is impermissible. The appellate Tribunal cannot sustain the case of the Revenue against the appellants on a ground not raised by the Revenue either in the show cause notice or in the order. 18.In this context, we may usefully refer to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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