By TIOL News Service

MUMBAI, AUG 12, 2017: CENVAT credit has been denied on the following counts -

a) Rs.11,08,694/- availed on debit notes issued by the service provider;

b) Rs.1,26,385/- availed on bus service for which the recovery was made from the employees.

The appellant submits -

+ Though the title of the documents is debit note but it contains all the information as required for invoice/challan in terms of Rule 4A of Service Tax Rules, 1994. Therefore, the debit notes having all the required information cannot be discarded for allowing the credit. [M/s. Emmes Metals Pvt Ltd. - 2016-TIOL-999-CESTAT-MUM relied upon]

+ As regards credit of Rs.1,26,385/- availed on bus service, the entire demand is time barred as the extended period was invoked; that the issue has been finally decided by Bombay High Court in the case of Ultratech Cement Ltd - 2010-TIOL-745-HC-MUM-ST ; therefore, the issue was contentious and no suppression of facts can be alleged.

The AR, while reiterating the findings of the impugned order submitted that debit notes are not prescribed document for availing CENVAT credit in terms of Rule 9 of CCR, 2004 and hence credit is inadmissible. As regards the credit availed on bus services, the AR submits that the assessee appellant had suppressed the fact that credit was availed and also the fact that recovery of service charges was made from the employees; that this fact was unearthed only during audit.

The Bench observed -

++ As regard credit on debit notes, on going through the copies of debit notes, I find that all the necessary information which are required to be appeared on the service tax paying document i.e. invoice, challan etc. are clearly mentioned in the debit notes, therefore except the title of document there is no difference between the details supposed to be appeared in the invoice and the details which actually appearing in the said debit notes. Therefore, the credit on such debit notes cannot be denied.

++ I find that regarding the availment of Cenvat Credit on bus service and recovery of the service charges from the employee were not disclosed to the department by the appellant, therefore there is a clear suppression of fact on this count. Hence, the demand for extended period is correct, accordingly the demand of Rs.1,26,385/-; corresponding penalty and interest are upheld.

The appeal was partly allowed.

(See 2017-TIOL-2900-CESTAT-MUM)