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PJ/Case Laws/2010-11/1061

Admissibility of Cenvat Credit

Case: Ultra Tech Cement Ltd v/s Commissioner of Central Excise, Nagpur
 
Citation: 2011-TIOL-154-CESTAT-MUM
 
Issue:- Credit cannot be denied on the some defects in documents when there is no dispute on right of assessee to avail credit
 
Brief Facts:- The service providers providing service to the appellant had not paid the service tax on the services provided to the appellant. The fact of non-payment was discovered later on by the Department. As soon as this fact was pointed out to the service providers discharged their tax liability and raised supplementary invoices to the appellant. Appellant availed cenvat credit on the basis of supplementary invoices issued by the service providers to him.
 
Cenvat credit was denied to appellant by the department on the ground that credit was claimed on the basis of supplementary invoices and there was no provision for claiming such credit in case of service tax.
 
Hence, issue is before the Tribunal.
 
Reasoning of Judgment:- The Tribunal held that it is settled law that procedural laws are not to be understood in a manner which will deny the rights assured to the parties. Once the assessee is entitled to take credit in relation to the duty paid on the inputs or capital goods and this right being not in dispute, merely because there is some infirmity observed in the documents on which the credit sought to be availed, that cannot be a justification for denying the credit.
 
The Tribunal held that prima facie case is made out in favour of the assessee. S
 
Decision:- Stay granted and pre-deposit waived.
 
Comment:- This is small but landmark judgement. When the right of assessee to take credit is not in dispute then the credit cannot be denied on small defects in the documents. The service tax assessee cannot issue supplementary invoices as per Cenvat credit Rules. When the service tax is paid then the credit has been allowed by Tribunal. 

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