Hindalco Industries Ltd. Vs Commissioner of Central Excise (CESTAT Allahabad)
CESTAT Allahabad held that denial of CENVAT Credit on supplementary invoices evidencing the payment of service tax for period prior to amendments made in CENVAT Credit Rules, 2004 by way of insertion of Rule 9 (1) (bb) effective from 01.04.2011 is unjustified.
Facts- Appellant is a manufacturer of excisable goods and are availing the CENVAT Credit as admissible to them in terms of CENVAT Credit Rules, 2004. Appellant received services from various contractors for provision and execution of various works such as maintenance and repair service, cleaning service, cargo handling service, recruitment agency service, and site formation service.
The service providers issued bills and subsequently supplementary bills in respect of the service provided. In some cases no service tax was charged on the original bill and in some case part service tax was charged. Subsequently service providers issue supplementary invoices/ bills and charged the uncharged portion of service tax from the appellants. Appellants paid the service tax, against the invoices/ bills and supplementary invoices/ bills.
Revenue was of the view that the 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.
Conclusion- Held that we do not find any 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. As we decide the issue on merits we are not taking up any submissions made by the appellant in respect of invocation of extended period of limitation. As we set aside the order disallowing the CENVAT Credit, the order demanding the interest and for imposition of penalty to will be set aside.
FULL TEXT OF THE CESTAT ALLAHABAD ORDER
1 .I disallow the Cenvat credit of Rs 1,54,51,005.15 (S Tax Rs 1,50,66,971.97 + Ed. Cess Rs 3,01,337.69 + S & H Ed Cess Rs 82,695.49) availed by the party on input services on the strength of supplementary invoices under rule 14 of CENVAT Credit Rules, 2004 read with proviso to section 1 1A (1) of the Central Excise Act, 1944 alongwith interest as provided under section 1 1AB of the Act as proposed in the Show Cause Notice No 06-Commr./Alld./2011 dated 22.03.11.
2. I also impose a penalty of Rs 2000/- only under rule 15 of the Cenvat Credit Rules, 2004 as applicable during the impugned period.
3. In the same way, I disallow the Cenvat credit of Rs 87,859.69 (S Tax Rs 84,915.48 + Ed Cess Rs 1976.50 + S & H Cess rs 967.71) under rule 14 of CENVAT Credit Rules, 2004 alongwith interest as proposed in the Show Cause Notice No 01/Dem/R-I/Rnkt/201 1 dated 13.04.2011.
4. I also impose a penalty of Rs 87,859.69 on the party under rule 15 of the Cenvat Credit Rules, 2004 as applicable during the impugned period.
2.1 Appellant is manufacturer of excisable goods and are availing the CENVAT Credit as admissible to them in terms of CENVAT Credit Rules, 2004.
2.2 During the period from 2008-09 till December 201, Appellant received services from various contractor for provision and execution of various works such as maintenance and repair service, cleaning service, cargo handling services, recruitment agency service, site formation service.
2.3 The service providers issued bills and subsequently supplementary bills in respect of the service provided. In some cases no service tax was charged on the original bill and in some case part service tax was charged. Subsequently service providers issue supplementary invoices/ bills and charged the uncharged portion of service tax from the appellants. Appellants paid the service 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 with section 11 AC of the Central Excise Act, 1944 for contravention of CENVAT Credit Rules, 2002.
2.5 Both the show cause notices have been adjudicated by the impugned order.
2.6 Appellant being aggrieved by the impugned order filed the appeal, whereas revenue being aggrieved by the par of order whereby only penalty of Rs 2000 has been imposed on the appellant filed the appeal.
3.1 We have heard Shri Atul Gupta & Shri Prakhar Shukla, advocates for the appellant and Shri Manish Raj, Authorized Representative for the revenue.
3.2 Arguing for the appellants learned counsel submits:
> Supplementary invoices issued under Rule 4A of the Service tax Rules, 1994 by service providers, are proper and valid documents for availing Cenvat credit in terms of Rule 9(1)(f) of the credit rules.
> In absence of any dispute on receipt of input services by Appellant as well as tax paid nature such services utilized in manufacture of dutiable finished goods, Cenvat credit cannot be denied to Appellant in terms of the proviso to rule 9 (2) of the Credit Rules.
