CA Urvashi Porwal
In the case of CCE V/s M/s. Essel Propack Ltd. it was held that Rule 9 is a procedural aspect which cannot deny the claim of the respondents to avail of such CENVAT Credit which they are, otherwise, admittedly, entitled to and hence CENVAT credit is allowed on the basis of TR-6 challan.
In the present case, the assessee during the period prior to 16/06/2005 has availed CENVAT credit on the basis of TR6 Challan. The Revenue disallowed the same by alleging that TR-6 challan is not the document prescribed under Rule 9 of the CENVAT Rules and hence CENVAT credit should be disallowed. The CESTAT allowed the CENVAT credit to the assessee. On being aggrieved by the said order, the Revenue preferred the present appeal.
Contentions of the Revenue
The Revenue contended that Rule 9 of CENVAT Credit Rules, 2004 clearly provides the requisite documents to be produced in order to avail of the CENVAT Credit. The Revenue further that the assessee has not produced any of such documents and, as such, the question of availing of any credit, on such basis, would not arise at all. The respondents have a TR6 Challan to substantiate their claim for refund of service tax though such document was introduced by the amendment to the Rule in 2005 to avail of CENVAT credit. The Revenue further pointed out that the subject period, in the present proceedings, is from 1/5/2005 to 15/6/2005 when the said amendment was not in force, and as such, the question of relying upon such TR6 Challan does not arise at all.
Contentions of the Assessee
The Assessee contended that the fact that the respondents are eligible for such credit has not been disputed by the Authorities. The Assessee submitted that the right to avail such credit flows from Rule 3 of the CENVAT Credit Rules, 2004 and not under Rule 9 which is only procedural. The assessee further submitted that even in the year 2004-05 TR6 challans were issued when certain tax was paid and such documentary evidence which comes from the Department itself can be accepted to substantiate their claim for CENVAT credit.
Held by Hon’ble High Court of Bombay at Goa
The Hon’ble High Court stated the CENVAT Credit Rules, 2004 do not prescribe any documents for availing of service tax credit during the disputed period in respect of the service tax paid on goods transport agency services. The appellant, in the present case, has nowhere contended which were the specified document for availing of such credit during the relevant time. If no documents have been mentioned, TR 6 challan has to be considered as a proper document, reflecting payment of such tax. Further, it is also not the case of the appellant that service tax was not paid by the respondents or that they were otherwise not entitled to such credit.
The Hon’ble Court referred to the judgment of The Punjab & Haryana High Court, in the case of Commissioner of Central Excise, Ludhiana vs. Ralson India Ltd., reported in 2006 (202) E.L.T. 759 (P &H) wherein it was held that if the duty paid has the character of inputs and their receipt in manufacturer’s factory and utilization in manufacture of final product is not disputed, then the credit cannot be denied to such person. It is also to be noted that the Department’s Circular dated 19th November, 2001 observes that once the duty payment is not disputed and it is found that the documents are genuine and not fraudulent, then the manufacturer would be entitled to CENVAT credit on duty paid inputs.
In the present case, the authorities have accepted that the respondents are entitled to such CENVAT Credit. The only point for consideration, in such circumstances is the type of document required to be produced to avail of such credit.
The Hon’ble Court stated that the question of discarding the said Challan to avail of such CENVAT Credit cannot be accepted. The Authorities below, as such, have rightly accepted the said Challan as proof of payment of service tax and, as such, no infirmity can be found in the orders passed by the Authorities below. In any event, the appellants are not entitled to rely upon Rule 9 to refuse the credit to the respondents, as Rule 9 is a procedural aspect which cannot deny the claim of the respondents to avail of such CENVAT Credit which they are, otherwise, admittedly, entitled to.
In view of the above, the appeal has been dismissed.