Whether TR-6 is a valid duty paying document?

PJ/Case Laws/2010-11/1079

Case: Commissioner of Central Excise v/s M/s Federal Mogul Goetze (I) Ltd

Citation: 2010 (20) STR 161 (P & H)

Issue:- Whether the Tribunal was justified in allowing availment of Cenvat Credit on the basis of TR-6 Challans issued by a person other than the service provider, which is not a prescribed document in terms of Rule 9 (1)(e) of the Cenvat Credit Rules, 2004 for availing the Cenvat Credit by service provider?

Whether the Tribunal was right in setting aside the penalty imposable under Rule 15 of the Cenvat Credit Rules, 2004?

Brief Facts:- Respondent-assessee is engaged in manufacture of Pistons and Gudgeon Pins and is also engaged in rendering cleaning services. It availed Cenvat Credit in respect of payments made to M/s Star Professional Services during the period from August 2005 to December, 2005 when they were not registered but had issued invoices. They had vide letter informed the Department that they were providing cleaning service through a sister concern under the same management and premises and they would like to pay the service tax under the firm Star Security & Employment to save additional work load.

The Adjudicating Authority did not accept the claim of Cenvat Credit and raised demand for service tax and also imposed penalty which was upheld by the Appellate Authority.

But on further appeal, the Tribunal accepted the plea of the assessee. It was held that the assessee received industrial cleaning services which was provided by M/s Star Security & Employment through M/s Star Professional Services which had paid the service tax through TR-6 Challan. It was held that TR-6 challan during the relevant period was a valid document on the basis of which cenvat credit could be taken. And the assessee was entitled to credit on that basis. It was further held that though initially M/s Star Profession Services did not have the registration, in January, 2006 it took the registration which had to be taken into account. Moreover, its sister concern was already registered.

Reasoning of Judgment:- The High Court held that it is clear from the finding recorded above that the service provider who issued invoices was the sister concern of M/s Star Security and Employment which was already registered and had discharged service tax liability under TR-6 challan. There was, thus, no ground to reject the claim for Cenvat Credit. The finding being not in any manner perverse, no substantial question of law arises.

Decision:- Appeal dismissed.

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PJ/Case Laws/2010-11/1079

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