Availability of credit if service tax registration number is not mentioned on invoice.

PJ/Case law/2014-15/2287

Case:- CASTROL (I) LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIGAD

Citation:- 2014-TIOL-1049-CESTAT-MUM

Brief facts:- The appeal and stay petition were directed against Order-in-Original No. 171/MAK/(171)/Commr/RGD/13-14 dated 15/01/2014 passed by Commissioner of Central Excise, Raigad Commissionerate. Vide the impugned order, the learned Adjudicating authority had confirmed a duty demand of Rs. 66,55,823/- being the ineligible amount of credit taken by the appellant on the strength of invalid/incomplete documents. In addition, interest liability on the said demand had also been confirmed apart from an equivalent amount of penalty under Section 11AC of the Central Excise Act, 1944. Aggrieved of the same, the appellant was before the Tribunal. The appellant had also filed an application for early hearing of the appeal.

Appellant’s contentions:- The learned Counsel for the appellant submitted that the allegation in the show-cause notice was that the invoices of the service providers, who rendered the services to the appellant, did not contain their registration numbers. As per Rule 9 of the Cenvat Credit Rules, 2004, the document on the strength on which the credit was taken should contain the name and address and registration number of the person providing these services. Name and address of the input service distributors, the amount of credit. Inasmuch as the registration number of the service provider was missing, the credit was sought to be denied. The learned Counsel also submitted that the services were received by the Head Office which was registered as input service distributor and the Head Office issued ISD invoices for availment of credit. His first contention was that there was no short coming as the Credit was taken by the appellant based on the ISD invoices issued by the Head Office. His second contention was that during the course of adjudication proceedings, they had submitted a list containing the service tax registration numbers of all the service providers. Therefore, the department could have verified whether these service providers were registered with the department or not and the service tax amounts indicated in the corresponding invoices issued by the service providers were in fact paid to the exchequer or not. Merely for the technical lapse of non-mentioning of the registration number, the substantive benefit of credit could not be denied or disallowed to the appellant. Accordingly, he pleaded for grant of stay.

Respondent’s contentions:-The learned Additional Commissioner (AR) appearing for the Revenue on the other hand submitted that in the details given to the department with regard to the registration numbers, the invoices mentioned therein pertain to the subsequent period and therefore, it could not be concluded that at the relevant time these service providers were registered with the department. Therefore, he pleaded for putting the appellant to terms.

Reasons of judgment:- As the issue lied in a narrow compass, the Bench were of the considered view that the appeal itself could be disposed of at this stage. Accordingly, after dispensing with the requirement of pre-deposit and with the consent of both the sides, the appeal itself for taken for disposal. The short question for consideration was whether the appellant was entitled to the credit availed on the ground that the registration number of the service provider was not indicated on the invoices. It was the fact on record that during the adjudication proceedings, the appellant had provided to the department, the registration number of the service providers. Therefore, the adjudicating authority could have easily verified whether these service providers were registered with the department at the relevant time and whether they had discharged the service tax liability in accordance with the law. The adjudicating authority had unnecessarily chosen to raise the level of litigation by denying the credit as if it was Tribunal's job to get verification done. In these circumstances, they were of the view that the matter had to be remanded back to the adjudicating authority for verification of the registration numbers declared by the appellant in respect of the service providers and also for verifying whether the service tax indicated in the invoices was paid to the exchequer or not. Thus, the appeal was allowed by way of remand. Stay petition and the application for early hearing also stood disposed of.

Decision:- Appeal was allowed by way of remand.

Comment:- The analogy drawn from the case is that although cenvat credit is not available until and unless the invoice satisfies all the required particulars including mention of service tax registration number. However, if in case service tax registration number is not indicated on the invoice but the service receiver brings to the knowledge of the department the registration number of the service provider, then the department after verifying the same shall allow cenvat credit. This is for the reason that non-mentioning service tax registration number is a procedural lapse due to which substantive benefit should not be denied to the assessee.

{Prepared by: Ranu Dhoot.}

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PJ/Case law/2014-15/2287

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