Whether debit notes issued by the service providers are valid documents for availing cenvat credit?

PJ-Case law-2013/14-1602

Case:- M/s DIAMOND CEMENTS Vs. COMMISSIONER OF CENTRAL EXCISE, BHOPAL

Citation:- 2013-TIOL-836-CESTAT-DEL

Brief Facts:- The appellant has taken credit on debit notes. There is no dispute that the debit notes issued by the service providers on the basis of which cenvat credit has been availed, contain the information viz. the service provider's name and address, service tax registration no., nature of the service provided, value of the service, service tax paid, etc and as such, all the information which is required in the invoices is there in the debit notes. The department being of the view that the debit notes are not the valid documents prescribed in Rule 9 of the Cenvat Credit Rules, initiated proceedings for denial of the cenvat credit taken on the basis of debit notes. These proceedings resulted in issue of an order-in-original by the Asstt. Commissioner by which he confirmed cenvat credit demand along with interest and imposed penalty on the appellant under Rule 15 of the Cenvat Credit Rules, 2004. This order of the Asstt. Commissioner was upheld by the Commissioner (Appeals) vide order-in-appeal against which this appeal has been filed.

Appellant’s contention:- The appellant pleaded that the debit notes issued by the services providers on the basis of which the cenvat credit was taken by the appellant, contained all the information which is required to be mentioned in the invoices, inasmuch as the debit notes contained the service provider's name and address, service tax registration no., nature of the service provided, value of the service, service tax paid, etc. that in view of this, the debit notes have to be treated as valid duty paying documents for availment of cenvat credit, that the Tribunal in a series of decisions in cases of Pharmalab Process Equipments Pvt. Ltd. Vs. CCE, Ahmedabad reported in 2009 (16) STR 94 = (2009-TIOL-2215-CESTAT-AHM); CCE, Salem Vs. M/s. Pallipalayam Spinners (P) Ltd. reported in 2010-TIOL-1723-CESTAT-MAD; Chemplast Sanmar Ltd. Vs. CCE, Salem reported in 2010 (17) STR 253 (Tribunal-Chennai) = (2010-TIOL-180-CESTAT-MAD) and M/s. The Supreme Industries Ltd. Vs. CCE, LTU, Mumbai reported in 2011-TIOL-1213-CESTAT-MUM has held that cenvat credit can be availed on the basis of debit notes if the same contain all the information, which, required to be mentioned in the invoices and that in view of this, the impugned order upholding the cenvat credit demand along with interest and imposition of penalty is not sustainable.

Respondent’s Contention:- The Respondent defended the impugned order by reiterating the findings of the Commissioner (Appeals) and relied upon the judgement of the Tribunal in the case of Godrej Consumer Products Ltd. reported in 2010 (20) STR 609 (Tribunal-Delhi) = (2010-TIOL-1739- CESTAT-DEL),wherein it was held that debit note is not a valid duty paying documents for taking cenvat credit.

Reasoning of Judgment:- The Tribunal have carefully considered the submissions from both the sides and perused the records. The only point of dispute in this case is as to whether debit notes on the basis of which cenvat credit has been availed are valid duty paying documents for this purpose. On going through the debit notes placed on record, Tribunal finds that the same contain all the information, which is required to be mentioned in the invoices. The Tribunal also finds that other Benches of the Tribunal in a series of judgements, as mentioned above, have held that debit notes are valid documents for availing cenvat credit, if the same contained all the information which is required to be mentioned in the invoices. Same view has been taken by the Tribunal in cases of Missonpharma Logistics (I) P. Ltd. reported in 2012 (27) STR 60, CCE, Indore Vs. Gwalior Chemical Industries Ltd. reported in 2011 (274) ELT 97 = (2011-TIOL-1635-CESTAT-DEL) and CCE, Nasik Vs. Graphite (I) Ltd. reported in 2006-TIOL- 1531-CESTAT-MUM.Since in this case, the debit notes contained all the required information, the same have to be treated as valid duty paying documents for availing cenvat credit. Though the ld. DR has cited the judgement of the Tribunal in the case of Godrej Consumer Products (supra), the same is a Single Member Judgement and does not consider a series of judgements of the Coordinate Benches where a contrary view has been taken.

In view of the above discussion, the impugned order is not sustainable. The same is set aside. The appeal is allowed.

Decision:- Appeal allowed.

Comment:- It is clear from this case that if the debit notes contained all the required information, the same have to be treated as valid duty paying documents for availing cenvat credit.

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PJ-Case law-2013/14-1602

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