TMI Blog2023 (10) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... zed over and above the 20% cap. The Tribunal in the case of M/S. GE MONEY FINANCIAL SERVICES P. LTD. VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI [ 2019 (5) TMI 1569 - CESTAT CHANDIGARH] had occasion to analyse the very same issue. It was held that the demand to recover the amount utilized over and above 20% cannot sustain and that the assessee would be liable to pay interest for the intervening period from the date of excess utilization of credit till 01.04.2008. It was also held that penalty cannot be imposed. Thus, the demand of service tax to the tune of Rs.24,10,286/- cannot sustain and requires to be set aside. The penalties imposed also cannot sustain and are set aside. However, the appellant is liable to pay the interest on this amount from the date of utilisation of credit till 01.04.2008. Credit availed on various input services - HELD THAT:- The appellant has availed credit on input services in the nature of premium paid on motor vehicle insurance, group insurance for employees, personal accident insurance for employees, life insurance etc. The other services are tour and travel and event management service (entertainment service) - prior to 01.04.2011 the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the year 2007-08, the appellant had availed cenvat credit on common inputs services used for both taxable and exempted services and had not maintained separate books of accounts. They had utilized such credit in excess of 20% limit as prescribed in Rule 6 (3) (c) of Cenvat Credit Rules, 2004. 2.1 Further, they had also availed credit of Rs.8,69,567/- on input services used exclusively for exempted services which was in violation of Rule 6 (1) of CCR, 2004. 2.2 Again, the appellant had availed ineligible credit on insurance premium paid on motor vehicles used by their Directors / officials (Rs.1,02,930/-), tour and travels Services (Rs.1,87,518/-), Entertainment Services (Rs.7,57,185/-) all of which appeared to be not covered by definition of input service under Rule 2 (l) of CCR 2004. 2.3 The appellant had also taken credit of Rs.10,69,893/- based on a debit note raised by M/s.Kadri Consultants Pvt. Ltd., who had rendered architect service, which is not a prescribed document under Rule 9 of CCR 2004 for availing credit. 3. Thus, the appellant appeared to have availed ineligible credit amounting to Rs.29,87,093/-. It was also found that the appellant has short p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Ld. Counsel in a table is below : Relevant period April 2007 to March 2008 Total demand Rs.50,84,289/- Disputed demand amount Demand particulars Amount (Rs.) Service Tax short payment on account of wrong utilization of CENVAT credit over and above 20% of the output tax liability in contravention of Rule 6(3) (c) of the CENVAT Credit Rules, 2004. 24,10,286/- CENVAT Credit availed on ineligible services 7,36,922/- Credit availed on the basis of Debit Notes 10,67,514/- Interest Under Section 75 of the Finance Act, 1994 read with Rule 14 of the CENVAT Credit Rules, 2004 Penalty Rs.50,84,289/- Admitted and paid demand amount Rs.8,69,567/- payment made prior to issuance of SCN vide challan dated 17.09l2008. Extended period of li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance is not eligible. So also, the department has denied the credit availed on tours and travels and entertainment services. It is submitted by the learned counsel that motor vehicle insurance services were availed on the premium paid for insurance of motor vehicles owned by the appellant and utilized for transport of top officials for official purposes. It would fall within the definition of input services under Rule 2 (l) of Cenvat Credit Rules, 2004 as it is related to the business activities of the appellant. Ld. Counsel relied upon the decision in the case of Manikgarh Cement Vs CCE Customs Nagpur - 2012 (11) TMI 601 CESTAT MUMBAI and CCE Mumbai Vs Classic Stripes Pvt. Ltd. - 2017 (10) TMI 281 CESTAT MUMBAI. The department has denied credit on the premium paid on group medical claim / personal accident and life insurance alleging that these are availed for personal consumption. It is submitted that the employees of the appellants are integrated with the output services provided by the appellant and its business. The insurance taken for the employees is availed for the health of the said employees and is directly in relation to the business of the appellant. To suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnai - 2021 (9) TMI 688 CESTAT CHENNAI to argue that the Tribunal in the said case had allowed the credit availed on debit notes. The decision in the case of R.R. Donnelley India Outsource Pvt. Ltd. Vs Commissioner 2019 (2) TMI 865 CESTAT CHENNAI was relied by the counsel to argue that merely because the registration number of the service provider is not shown in the document, the credit cannot be denied. Ld. Counsel argued that in the present case the credit has been availed on a single debit note issued by the architect M/s.Kadri Consultants Pvt. Ltd. who rendered architect service to the appellant. The department has not disputed the payment of service tax by the appellant to the service provider. The adjudicating authority could have verified the transaction. Instead he has stated that the document is doubtful as it does not contain registration number of service provider. When tax has not been disputed, the denial of credit on the recipient s end alleging that the registration number of the service provider is not mentioned in the invoice is incorrect. The period involved is 2007 and it would not be now possible for the appellant to procure any details even if remanded afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard both sides. 8. The first issue is with regard to the wrong utilization of cenvat credit over and above the 20% of the output tax liability in contravention of Rule 6 (3) (c) of CCR 2004. As per the impugned order, an amount of Rs.24,10,286/- has been confirmed under this head. Prior to 01.04.2008, there was restriction that when an assessee is providing both exempted services and taxable services, the credit can be utilized only upto 20%. In the present case, it is not disputed that the appellant has utilized credit for payment of the service tax beyond the prescribed 20%. This provision imposing restriction was omitted w.e.f. 01.04.2008. After 01.04.2008, there was confusion as to whether an assessee has to repay the amounts so utilized over and above the 20% cap. The Board vide its circular No.137/12/2008-CX.4 dated 21.11.2008 issued a clarification which reads as under : ..As no lapsing provision was incorporated and that the existing Rule 6(3) of the Cenvat Credit Rules does not explicitly bar the utilization of the accumulated credit, the department should not deny the utilization of such accumulated Cenvat credit by the taxpayer after 1-4-2008. Further, it must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the light of the above decision, the appellant is liable to pay interest from the date of utilization of Cenvat credit till 1.4.4008. 8. Therefore, we hold that the appellant is liable to pay interest for the intervening period i.e. the date of excess utilization of credit till 1.4.2008. 9. Therefore, we set aside the impugned order restricting 20% of utilization of credit and recovery thereof but the appellant is directed to pay interest for the intervening period. In that circumstance, no penalty is imposable on the appellant. 10. With regard to the denial of credit on inputs services namely, guest house and staff welfare expenses, we find that the said services have been availed by the appellant for providing output services and the same have been availed in the course of their business of providing output services. Therefore, in terms of the decision of Hon ble Bombay High Court in the case of Ultratech Cement Limited (supra), the appellant is entitled is entitled to avail credit on guest house and staff welfare expenses. Therefore, the credit cannot be denied to the appellant. 10. Following the said decision, we are of the opinion that the demand of service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, the substantive right of credit cannot be denied. In the case of Gates Unitta India Company Pvt. Ltd. (supra) the question whether credit availed on debit notes is eligible. The Tribunal observed as under : 11. Further on the issue whether debit notes are valid documents to avail credit, it has to be stated that though Rule 9(1) of CENVAT Credit Rules, 2004 does not mention debit note as a document on which credit can be availed, when all necessary particulars are mentioned the credit cannot be denied for the only that it is a debit note. In Bharati Hexacom Ltd. 2018 (12) GST 13 (Raj.) the credit availed on debit notes was held to be eligible. In the case of Gabriel India Ltd. 2017 (48) STR 492 (Tri. Del.) it was held that credit availed on debit notes cannot be denied when the eligibility of credit is not disputed. We hold that the denial of credit on the ground that the document on which credit is availed is a debit note is not legal or proper. 13.1 In the case of M/s.R.R. Donnelley India Outsource Pvt. Ltd. (supra) the Tribunal had occasion to consider the issue of denial of credit on the ground that the invoices does not show the registration number of the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Provided that the said document does not contain all the particulars but contains details of duty or Service Tax payable, description of the goods or taxable service, assessable value, central excise or Service Tax Registration No. of the person issuing the invoices as the case may be, the name and address of the factory or warehouse or premises of first or second stage dealers or provider of taxable service From the above, it becomes clear that the name and address of the person receiving the taxable service is not a mandatory requirement. Secondly I also find that even verification of documents has not been done by the original authority properly and ongoing through the invoice produced by the appellants before me, I find that full name and address of the service receiver, the nature of service provided, Registration No. of the service provider, amount of Service Tax paid for the service rendered and address of the issuer are available in the invoice. At least I could not make out any deficiency in the invoice. The Assistant Commissioner made a categorical observation that above mentioned particulars, meaning thereby, name and address of the person receiving taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view prevailing that credit is admissible in respect of service rendered by commission agent. In fact, there is a Circular issued by the Board where such a view has been taken. Under these circumstances, extended period could not have been invoked in this case. The discussion above would show that on merits as well as on limitation, the impugned order cannot be sustained. Accordingly, the impugned order is set aside and appeal allowed with consequential relief if any to the appellants question and is in dispute before him. Otherwise there is no indication forthcoming as to whether the Commissioner (Appeals) had a look at the invoice or not. This is the sole ground on the basis of which he has disallowed the Cenvat credit. After considering the invoice, I am not able to find any deficiency in the bill/invoice, I have to take a view that Cenvat credit has been taken correctly. Accordingly this demand of Rs. 3,30,189/- is set aside. .. 14 . Demand of Rs. 39,60,634/- was confirmed on the ground that same was wrongly availed on ISD invoices issued by the appellant s Ahmedabad and Mumbai branch for services availed prior to the date of ISD registration was granted for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adri Consultants Pvt. Ltd. It would have been easy for the department to verify by calling for a report from the Range Superintendent. Even after earlier remand by the Tribunal, the department has not taken any steps to call for a report from the range officer to verify the details if they had any doubt as to veracity of the payment. In such circumstances, as there is no allegation in SCN as to the veracity of the document, following the decisions as above, we are of the view that the credit of Rs.10,67,514/- denied and confirmed by the impugned order requires to be set aside . Ordered accordingly. 15. The fourth issue is with regard to demand of Rs.8,69,567/-. This liability amount is admitted by the appellant and paid on 17.09.2008. Show cause notice is issued on 19.10.2009. The appellant has not paid the interest on the said amount. Ld. Counsel has argued on the penalty imposed to this amount. It is submitted by the learned counsel that the penalty has been imposed alleging that the appellant has suppressed facts with an intention to evade payment of tax. On going through the show cause notice, we find that there is no positive act of wilful suppression of facts alleged again ..... X X X X Extracts X X X X X X X X Extracts X X X X
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