TMI Blog2023 (8) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... with effect from 01.04.2011, which was akin to the what had been provided in respect of the goods, Rule 9 (1) (bb) was a natural consequence to align the CENVAT Credit Rules in respect of services and goods. It is the first time that CENVAT credit rules made distinction between the Invoice and Supplementary invoices in respect of service tax paid. Hence order of Commissioner drawing support from newly inserted rule 9 (1) (bb) to apply the Rule 9 (1) (b) for denying the credit availed by the appellant cannot cannot be sustained. There are no merits in the impugned order denying the credit on the supplementary invoices evidencing the payment of service tax for the period prior to amendments made in the CENVAT Credit Rule, 2004 by way of insertion of Rule 9 (1) (bb) with effect from 01.04.2011 - the issue of invocation of extended period of limitation not required to be taken of. The order disallowing the CENVAT Credit set aside, the order demanding the interest and for imposition of penalty will be set aside - the demands for Cenvat credit, interest and penalty is set aside. Appeal allowed. - HON BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON BLE MR. SANJIV SRIVASTAVA, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax, against the invoices/ bills and supplementary invoices/ bills. 2.4 Revenue was of the view that appellant could not have taken the credit of service tax charged on the supplementary invoices/ bills as these are not the prescribed documents for availment of CENVAT Credit. Accordingly, show cause notices dated 22.03.2011 and 13.04.2011 were issued to the appellant. Show cause notice dated 22.03.2011 was issued invoking a larger period of limitation as per proviso to sub-section (1) to section 11A, whereas show cause dated 13.04.2011 was within normal period of limitation. The show cause notice dated 22.03.2011 asked the appellant to show cause as to why the inadmissible credit of Service tax availed and utilized for payment of Central Excise duty on their final dutiable products amounting to Rs 1,54,51,005.15 (Service Tax Rs 1,50,66,971.97 + Ed. Cess Rs 3,01,337.69 + S H Ed Cess Rs 82,695.49) may not be be demanded and recovered from along with appropriate interest under rule 14 of CENVAT Credit Rules, 2004 read with proviso to section 11A (1) 11AB of the Central Excise Act, 1944 and penalty may not be imposed upon them under Rule 15 (2) of Cenvat Credit Rules, 2004 read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ➢ The demand made by the impugned order cannot be sustained either on merits or on ground of limitation. ➢ Appeal filed by the appellant be allowed and by the revenue dismissed. 3.3 Arguing for the revenue learned authorized representative reiterates the findings recorded in the impugned order and the grounds taken in the appeal filed by the revenue. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 For confirming the demand Commissioner has in the impugned order observed as follows: 6.1 The issue for determination involved in the case is whether supplementary invoice issued by a service provider is a specified document for the purpose of availment of Cenvat credit as per provisions of rule 9 of the Cenvat Credit Rules, 2004. Rule 9(1)(f) provides that Cenvat credit can be taken by a manufacturer on the basis of an invoice, bill or challan issued by a provider of input service on or after 10th day of September, 2004. 6.2 Rule 9(1) of the Cenvat Credit Rules, 2004 specifies the documents on the basis of which the Cenvat credit can be availed. In rule 9(1)(b) of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e party the service providers originally issued an invoice on which no tax was paid. 6.5 The intention of the legislation is very clear. Had there been intention to provide credit on the strength of such supplementary invoice issued by service provider it should have found place in the eligible documents under rule 9(1) of Cenvat Credit Rules, 2004 and omission in sub rule 9(1)(b) of Cenvat Credit Rules, 2004 in respect of supplementary invoice issued by a service provider also strengthens the view. 6.6 It will not be out of place to mention here that w.e.f. 01.04.2011 rule 9(1) of the Cenvat Credit Rules, 2004 has been amended by inserting rule 9(1)(bb) vide Notification No. 13/11-CE(NT) dated 31.03.11 which reads as under:- Rule 9(1)(bb)- a supplementary invoice, bill or challan issued by a provider of output service, in terms of the provisions of Service Tax Rules, 1994 except where the additional amount of tax became recoverable from the provider of service on account of non-levy or non-payment or short-levy or short-payment by reason of fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of the Finance Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service provider only when the non- payment of the service tax was detected by the department during the course of audit and supplementary invoices were raised. In that case, if even for the sake of argument only, the contention of the party is admitted that the supplementary invoices issued by the service provider is also covered as one of the genuine documents as provided under rule 9(1)(b) of the Cenvat Credit Rules, 2004, then in that case also the case of the party gets excluded under exclusion clause of the provisions of rule 9(1)(b) of the Cenvat Credit Rules, 2004, which says that if such additional duty is paid on account of fraud, collusion, willful mis-statement or suppression of fact etc, the Cenvat credit will not be allowed on such supplementary invoices. Therefore, even if the supplementary invoices issued by the service provider, which are not covered under rule 9(1)(b) of the Cenvat Credit Rules 2004, are taken as parallel document for the purpose of availment of Cenvat credit in that case also since they fall under the exclusion category of rule 9(1)(b) of the said rules, Cenvat credit is not admissible to the party on the strength of such invoices. 6.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve cited the following case laws:- (i) Abdul Rasak and other Vs. Kerala Water Authority and ors. AIR 2002 SC 817.. (ii) UOI Vs. Onkar S. Kanwar-2002 (145) ELT 266 (S.C.) (iii) Mathew M. Thomas Vs. Commissioner of Income Tax-1999 (111) ELT 4 (S.C.) Here in all the cases the issue involved was what is the relevant date to cover the non admissibility of Cenvat credit under the exception envisaged under Rule (9)(1)(b) of the Cenval Credit Rules, 2004. Rule (9)(1)(b) of the Cenvat Credit Rules, 2004 deals with the supplementary invoices issued by the manufacturer such is not the case here. In the present case the supplementary invoices has been issued by the service provider. (II) That invoice issued by a service provider in the present case is a proper document for availing the Cenvat credit in respect of Service Tax. On this issue they have cited the following case laws which are evidently distinguishable as facts relating to present case are distinct and different:- (i) EBG India Pvt. Ltd., Vs. CCE, Nasik - 2009 (240) ELT 317 (Tri-Mumbai) In this case Supplementary invoices were issued by the manufacturer/supplier of input. In the present case the supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be regarded as a valid document for the purpose of availment of Cenvat credit prior to 01.04.2011. The following decisions of Hon'ble CESTAT are quite relevant on this issue. (i) Tamilnadu Electricity Board Vs. CCE Coimbatore, reported in 2000 (116) ELT 473 (Tribunal) In para 5 of the decision Hon'ble CESTAT held as under:- Therefore, I find that though inputs may have suffered duty when they were received from SAIL, since the Modvat credit by appellant was taken on the strength of a document which does not qualify as a duty paying document under Rule 57G(3), therefore there is clear infringement of Rule 57G(2). Under these circumstances, I do not find any infirmity in the impugned orders und hence there is no merit in the appeal and the same is dismissed. The above decision has been given by the CEGAT in the context of Rule 57G(3) and Rule 57G(2) of the then Central Excise Rules, 194, but the observation of the CEGAT is quite relevant even today in so far as eligibility of specified documents for the purpose of availment of cenvat credit is concerned. (ii) Hon'ble CESTAT in the case of M/s JSW Steel Ltd., Vs. CCE, reported in (2008)17 STT 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uties or additional duty leviable under section 3 of the Customs Tariff Act, has been paid, except where the additional amount of duty became recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful misstatement or suppression of facts or contravention of any provisions of the Excise Act, or of the Customs Act, 1962 (52 of 1962) or the rules made there under with intent to evade payment of duty. Explanation.- For removal of doubts, it is clarified that supplementary invoice shall also include challan or any other similar document evidencing payment of additional amount of additional duty leviable under section 3 of the Customs Tariff Act; or c) a bill of entry; or d) a certificate issued by an appraiser of customs in respect of goods imported through a Foreign Post Office; or e) a challan evidencing payment of service tax by the person liable to pay service tax under sub-clauses (iii) and (iv) of clause (d) of sub-rule (1 ) of rule (2) of the Service Tax Rules, 1994; or f) an invoice, a bill or challan issued by a provider of input service on or after the 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Service Tax Rules also do not mention the issue of supplementary invoices when additional service tax is required to be paid due to any reason. In view of this, the term invoice mentioned in Clauses (f) and (g) of Rule 9(1) of Cenvat Credit Rules, 2004 has to be treated including supplementary invoice, as during the period of dispute, with regard to service tax payment, the Rule 9(1) did not make any distinction between invoice and supplementary invoice . 8. We also agree with the submission that during the period in dispute there was no restriction for availing cenvat credit and such credit would be admissible even assuming that the tax that has been paid by the service provider is due to deliberate evasion on his part for the period prior to 01.04.2011. The Tribunal in Para 9 of its decision in Delphi Automotive Systems (P) Ltd., (supra), has observed that : 9. As regards the restriction that the Cenvat credit of the tax paid under supplementary invoice would not be admissible when the tax paid is additional service tax not paid or short paid due to deliberate evasion, this restriction during the period prior to 1-4-2011 was only in respect of supply of inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject matter of these two appeals, show cause notices were issued and were adjudicated under separate orders in which the Cenvat credit amounts were disallowed and demanded. When the issue was challenged before the Commissioner (Appeals), through separate orders both dated 3rd June, 2010, he upheld the orders of the original authority and disallowed the Cenvat credits to the extent of Rs. 11,24,127/- and Rs. 7,04,314/- with equal amount of penalty and payment of interest. Both the orders are challenged before the Tribunal mainly on the following grounds : (i) The service tax stands paid by the service provider and subsequently invoices have been issued which are clearly relatable to the original invoices on which the consideration for the service was recovered. Since the service tax amounts have been duly paid, the Cenvat credit thereof should be allowed to the appellant. (ii) The supplementary invoice raised by the service provider is on par with the original invoice as has been held by various judicial pronouncements. Further, since there is no record of any proceedings initiated by the Revenue against service provider in which there are allegations of suppression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch. were not registered and the invoices issued by them did not mention any Service Tax registration no. That they subsequently took the service tax registration and paid Service Tax under supplementary invoice dated 14-9-2004, 23-12-2003 and 23-12-2004 is also not under dispute. There is also no dispute that input services have been used by the appellant for providing output services which are taxable. In view of this, it is not correct to deny the service tax credit on the basis of the above-mentioned supplementary invoices, just because at the time of receipt of the input services, the input service providers were not registered and had not mentioned Service Tax registration no. in the invoices. When the receipt of input services is not disputed and the fact that the input service had been used for providing the taxable output services is not disputed, the credit of Service Tax on the input services even if paid subsequently under supplementary invoices, cannot be denied. The impugned order, therefore, is not sustainable and the same is set aside. The appeal is allowed with consequential relief . 7. In the case law of Delphi Automotive Systems (P) Ltd. (supra) it has been c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of the Tribunal is sustained. Further, given the facts and circumstances of the case, there shall be no order as to costs . 4.5 The Commissioner has in his order referred to rule 9 (1) (bb) inserted with effect from 01.04.2011 to justify the invocation of Rule 9 (1) (b) for confirming the demand against the appellant. The above argument is devoid of any merits. Prior to 01.04.2011 service tax was payable only after receipt of consideration by the service provider. Rule 6 (1) of the Service tax Rules, 1994 was amended to provide for payment of service tax on the accrual basis instead of on the receipt basis i.e. service tax became payable, immediately on the issuance of the invoice evidencing the provision of taxable service by the service provider. The text of Rule 6 (1) prior to its amendment by Notification No 3/2011-ST dated 01.03.2011 is reproduced below: Rule 6 Payment of service tax. - (1) The service tax shall be paid to the credit of the Central Government, - (i) by the 6th day of the month, if the duty is deposited electronically through internet banking; and (ii) by the 5th day of the month, in any other case, immediately following the cale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment by the 31 day of March of the calendar year. ; (e) after the third proviso, the Explanation shall be omitted. Simultaneously the CENVAT Credit Rules,2004 were also amended by Notification No 13/2011-CE (NT) dated 01.03.2011 inserting Rule 9 (1) (bb) in the said rules as follows: (bb) a supplementary invoice, bill or challan issued by a provider of output service, in terms of the provisions of Service Tax Rules, 1994 except where the additional amount of tax became recoverable from the provider of service on account of non-levy or non-payment or short-levy or short-payment by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Finance Act or of the rules made thereunder with the intent to evade payment of service tax. Above two amendments were made with effect from 01.04.2011. As the manner of payment of service tax was made on the accrual basis with effect from 01.04.2011, which was akin to the what had been provided in respect of the goods, Rule 9 (1) (bb) was a natural consequence to align the CENVAT Credit Rules in respect of services and goods. It is the first time that CENVAT cr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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