TMI Blog2022 (11) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... pute 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 Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - Service Tax Appeal No. 40767 of 2021 - FINAL ORDER NO. 40359/2022 - Dated:- 11-11-2022 - MR. P. DINESHA, MEMBER (JUDICIAL) Shri Rah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Authority vide de novo Order-in-Original No. 07(R)/2021 dated 23.03.2021 rejected the claim of refund of Rs.10,47,890/-. 3.2 Thereafter, the said rejection came to be challenged before the First Appellate Authority, who, vide impugned Order-in-Appeal No. 98/2021 (CTA-I) dated 27.07.2021, upheld the rejection and thereby rejected the appeal filed by the appellant. The First Appellate Authority upheld the rejection inter alia on the grounds that:- The debit note dated 31.03.2017 was said to be as per the inter-se agreement dated 14.09.2017 between the appellant and the other party, for sharing common expenses; The revised ST-3 return filed on 08.09.2017 reflected the revision of Service Tax liability; The other party had not shown any debit towards the debit note in question in their ST-3 return; The debit note was not one of the prescribed documents as per Rule 9 of the CCR, 2004; The remand order in the first round was mainly to examine the debit note vis- -vis the supporting documents; In the remand proceedings, the Adjudicating Authority having examined in detail the debit note and the supporting documents, had concluded that the same was not eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, M/s. A A Dukaan Financial Services, appears to be the lessee in respect of some premises. The other party is stated to be related to the Appellant [termed as the associate company in the agreement dated 14.09.2017 Annexure 2]. This immovable property is apparently owned by a third party, to whom the other party appears to have paid rent. The relevant rental agreement is not placed on record before this forum. It is the Appellant s contention that the Appellant occupies a portion of that premises, and that it therefore incurs rental expenditure in favour of the other party. The only evidence supporting this alleged expenditure is a debit note dated 31.03.2017 raised by the other party on the Appellant for the sum of Rs. 3,58,98,977/- in respect of which the service tax is Rs. 53,84,847/-. Admittedly, no tax invoice was raised by the other party. 7.2 The Appellant further contends that this debit note was subsequently ratified / legitimised by an agreement between the Appellant and the other party dated 14.09.2017 which is on the record. This agreement purports to take effect retrospectively from 15.06.2016. The effect of this agreement appears to be to record and sanctify th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order travelled beyond the Show Cause Notice inasmuch as the denial of the claim was founded on different reasoning than that alleged in the Show Cause Notice. b. The eligibility to credit could not be questioned at the time of sanctioning refund. c. The eligibility to credit could not be questioned once the Service Tax paid by the service provider has been accepted by the Revenue. d. The agreement between the Appellant and the other party is in the nature of cross charge/ shared business services, entitling the Appellant to credit. e. Reliance was placed on the decision of the Hon ble jurisdictional High Court in M/s. Modular Auto Ltd. v. Commissioner of Central Excise, Chennai [2018 (8) TMI 1691 (Madras High Court)], and on the order of this Tribunal in M/s. Gates Unitta India Co. Pvt. Ltd. v. Commissioner of G.S.T. C.Ex., Chennai Outer Commissionerate [2021 (55) G.S.T.L. 364 (Tribunal Chennai)]. For the Revenue: a. Considering that the allegation in the Show Cause Notice was that the tax arising from the debit note in question was ineligible to credit, the order could not be said to have travelled beyond the scope of the Show Cause Notice. b. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered to M/s. Modular Auto Ltd. 14.3 In these facts, the Hon ble High Court held that there has been a service by BIL to M/s. Modular Auto Ltd. and that the legality or otherwise of the tax paid by the service providers (in that case, BIL and in this case, the other party) cannot be called into question in the case of the service receiver. This, the High Court held at paragraph 17, would amount to officers enjoying jurisdiction over the service recipient exercising power in respect of the service provider. It also negatived the contention of the Revenue that the amounts paid were mere reimbursements. 14.4 In my opinion, 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 als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quirements 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. I find that 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. It is not the case that they have arrived at a different finding than what was proposed in the Show Cause Notice. For the above reasons, I am of the view that no finding of the lower authorities has gone beyond the Show Cause Notice. 16.1 The third issue is whether there was any violation of Rule 9 of the CCR, 2004. It has been noted above that the consensus on this question is that a debit note may be a document on the basis of which input tax credit is claimed provided that it contains all the particulars required by Rule 9 of the CCR, 2004. Rule 9(2), in turn, refers to the Service Tax Rules, 1994. Proviso to Rule 9(2), which is relevant, reads thus:- Provided that if the said document does not c ..... 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