Whether assessee is entitled to avail credit on debit notes issued by supplier of goods?

PJ/Case Law/2013-14/1864

Case: - COMMISSIONER OF CENTRAL EXCISE, TIRUCHIRAPPALLI Vs REGMA CERAMICS LTD

Citation: - 2013-TIOL-1298-CESTAT-MAD

Brief Facts: - Brief facts of this case are that Respondent had availed Cenvat Credit of Rs. 9, 10,394/- during the period March 2007 to March 2008 on debit note which were not document specified under Rule 9(1) of Cenvat Credit Rule, 2004. Revenue was also of view that debit not did not contain all required particulars specified in Rule 9(2) of Cenvat Credit Rules, 2004. The adjudicating authority confirmed the demand for aforesaid amount along with interest and penalty for such reason.

Appellant contentions: - Appellant contention is that debit notes are not prescribed documents and they did not contain all the relevant particulars as specified under Rule 9(2) of Cenvat Credit Rules, 2004.

Respondent contentions: - The Respondent filed all contemporaneous documents including bills, agreement entered into for payment of royalty and the settlement of accounts of the provider of the service and recipient of serviceand proof of payment of service tax. After seeing that all these documents and recording it in Para-2 of impugned order, the commissioner set aside the order of adjudicating authority. He ordered as under-
“The appeal is allowed and order of lower authority is set aside. However the lower authority is directed to allow credit subject to verification of debit notes with the Rule stipulated in the Cenvat Credit Rules, 2004.”

Reasoning of Judgment: - It was held that theprovision of Rule 9(2) of Cenvat Credit Rules, 2004 gives enough power to the Central Excise officer to verify certain critical particulars in documents and thereafter allow credit in such situation if required minimum criteria are satisfied. Para-2 of the order of the Commissioner (Appeals) satisfied that such particulars have been furnished by Respondent. No reason for further Verification is recorded by the Commissioner (Appeals) though he ordered further verification. The appeal memorandum does not make out any factual discrepancies which need verification either. Accordingly, the appeal filed by the revenue is dismissed as being devoid of merits.

Decision: - Appeal dismissed.

Comment:-The gist of this case is that credit is admissible even on the basis of debit notes if the substantial particulars required can be verified and it is established that the said input/input service is utilized in the manufacture of final products or provision of taxable output service.

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PJ/Case Law/2013-14/1864

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