Whether Cenvat Credit is admissible on the strength of invoices issued by the ISD lacking details of service provider, invoice no. etc?

PJ/Case Laws/2012-13/1305

CASE:PANACEA BIOTEC LTD. V/s COMMISSIONER OF SERVICE TAX, DELHI

CITATION: 2012-TIOL-1571-CESTAT-DEL

BRIEF FACTS:The prayer in the application is to dispense with the condition of pre-deposit of Rs.8.29 lakhs confirmed against the appellant by denying them the benefit of Cenvat credit availed in respect of service tax paid on various services.

APPELLANT’S CONTENTION:Ld. Advocate explains that ISD had paid service tax on reverse charge basis and as such the question of invoice no. etc. does arise. He submits that above fact is mentioned in the invoice and the statement attached with the said invoice but fairly agrees that this position was not specifically clarified before the authorities below.

RESPONDENT’S CONTENTION:Revenue's objection is that the invoice on the basis of which credit has been availed is not proper invoice in as much as the details of service provider at the Head Office have not been mentioned.

The Ld. JCDR also draws attention to the reasoning adopted by the authorities below indicating that the details of the service provider at the Head Office was not available as such the credit availed by the appellant on the basis of invoices issued by ISD is neither proper nor legal.

REASONING OF JUDGEMENT:Prima-facie, Tribunal agreed with the appellant's contention. If the service tax has been paid by ISD (Head Office) itself on reverse charge basis, the details of the invoice of the service provider would not be available. As such it is found that denial of credit of Rs.6.77 lakhs on this technical ground is not prima-facie sustainable.

Further an amount of Rs.1.5 lakhs stands denied on the ground that the service tax paid on outdoor catering services as also on Mandap keeping services cannot be held eligible as the said services has no nexus with the manufacturing activity of the appellant. It is found that the Hon'ble Karnataka High Court in the case of Ace Designers Ltd. reported as 2012 (26) STR 193 (Kar.) has held that said services are meant for welfare measures and even though they are not specifically mentioned in the definition of input services, they are directly related to the business of the appellant and as such have to be held as eligible input services. To the similar effect is the decision of Hon'ble Bombay High Court in the case of Ultratech Cement Ltd. reported as 2010 (260) ELT 369 ( Born .) (2010-TIOL-745-HC-MUM-ST). As such on this count also, it is found that the appellant has a good case in its favour.

In view of the foregoing, Tribunal dispenses with the condition of pre-deposit of duty and allows the, stay petition unconditionally. At this prima-facie stage with the consent of both the sides, Tribunal took up to decide the appeal as the short issue is that the service tax was paid by their Head Office on reverse charge basis, said plea was not raised specifically before authorities below, the same requires verification. In view of the above, Tribunal set aside the impugned order and remand the matter to the original adjudicating authority to examine the above contention of the appellant. In as much as the appeal is remanded, the adjudicating authority would also reconsider the issue of availing of Cenvat credit in respect of outdoor catering services and Mandap keeping services keeping in view the above referred judgements of Hon'ble High Courts.

DECISION:Matter Remanded.

COMMENT:The analogy drawn from this case is very settled as the same is related to the fact that Cenvat Credit cannot be denied on account of procedural or technical lapses when it is clearly established that the inputs/input services were used in the manufacture of finished products. As in the above case, the service tax was paid by the ISD on reverse charge basis, mentioning invoice number, service provider details etc. was neither possible nor desirable.

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PJ/Case Laws/2012-13/1305

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