Admissibility of Cenvat Credit on the basis of Debit Notes containing all details under Rule 9(2) of CCR, 2004

PJ/Case Laws/2012-13/1106

Case: PHARMALAB PROCESS EQUIPMENTS PVT LTD Vs CCE, AHMEDABAD

Citation: 2009-TIOL-2215-CESTAT-AHM

Issue:- Cenvat Credit taken on the basis of debit notes containing all the details as Rule 9(2) of CCR, 2004 is admissible.

Brief Facts:- Appellant took Cenvat credit of Rs. 2,84,008/- of service tax paid on business auxiliary service. The credit was disallowed on the ground that credit was availed on the basis of debit notes and therefore the same is not admissible. An equal amount of penalty was also imposed and interest has also been demanded. The demand was upheld in appeal by the Commissioner (A).

Appellant is in appeal against the said order before the Tribunal.

Appellant’s Contention:- Appellants submitted that credit of service tax paid by them on Business Auxiliary Services (Commission Agent) received by them has been disallowed on the ground that the same was taken on the basis of debit notes. That there was an omission on the part of service provider in not issuing a proper invoice but issuing debit notes for the services provided. That the service was provided by Pharmalab (I) Pvt. Ltd. That even though the documents have been called as debit note, they contain all the details which are required as per proviso to Rule 9(2) of CENVAT Credit Rules and therefore denial of the same by the Original Adjudicating Authority and the Appellate Authority is not correct.

Respondent’s Contention:- Revenue submitted that credit has been taken on the basis of debit notes and it is not a prescribed document.

Reasoning of Judgment:- The Tribunal perused the copies of debit notes submitted and found that the debit notes issued by the service provider contained the details of service tax payable, description of the taxable service (sales commission), value of the taxable service, registration no. of the service provider, name and address of the service provider. These are the details which are required as per Rule 9(2) of CENVAT Credit Rules, 2004. The observations of the Assistant Commissioner were held to be contrary to the facts noticed by the Tribunal on the basis of documents submitted. Since it is not clear as to whether the same documents which were produced before the Tribunal were produced before the Assistant Commissioner, the matter has to go back to the Assistant Commissioner who shall go through the documents, verify whether service has been received and whether all the particulars as required under the Rules are available in the debit notes and adjudicate the matter afresh. If documents contain details required under Rule 98 (sic) [Rule 9(2)] of CENVAT Credit Rules, benefit of Service Tax Credit may be extended.

Decision:- Matter remanded back.

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PJ/Case Laws/2012-13/1106

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