M/S. India Housing vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 85-ST/LKO/2014 dated 11/08/2014 passed by Commissioner (Appeals), Customs, Central Excise & Service Tax, Lucknow]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. India Housing Appellants

Vs.

Commissioner of Central Excise Respondent

Lucknow

Appearance:

Shri Manoj Chouhan, CA for the Appellants

Ms Ranjana Jha, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 22.1.2015

FINAL ORDER NO. A/ 50273 /2015-ST(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order for denial of input service credit on account of discrepancy in the document on the strength of which Cenvat Credit was taken as per Rule 9(2) of Cenvat Credit Rules, 2004.

2. The facts of the case are that appellant is a service provider and they are taking Cenvat credit on certain services. During the course of audit, it was found that appellants has taken Cenvat Credit on the documents which are not correct documents under Cenvat Credit Rules, 2004. Therefore, by the impugned order Cenvat Credit of Rs. 2,88,134/- was sought to be denied along with interest and penalties. Aggrieved from the said order appellant is before me.

3. After hearing both sides, I find that in this case the Cenvat Credit was sought to be denied on five types of invoices :

1) on the invoice of Music Broadcast Pvt. Ltd.(Radio City, Mumbai). The invoices were issued by the service provider prior to obtaining service tax registration by the appellant. During the course of argument, learned AR submits that appellant is relying on the invoice dated 15.12.2007 and 31.12.07 but as per the show cause notice, these invoices does not match with the invoices mentioned in the show cause notice dated 8.9.11.

2) Second denial of the Cenvat credit in the case of invoices issued by M/s. India Housing, Lucknow was on account of service registration is not mentioned in the invoice.

3) The Cenvat credit sought to be denied on the invoices issued by M/s. Studio Parallele New Delhi as the invoices were issued by M/s. Sahara India Commercial Corpn. Ltd., and appellant took credit. Further, in the case of Jones Lang Lasalle, Gurgaon, the appellant has taken the credit as invoices were not in their name. In the case of M/s. Sandalwood.,Gurgoan also the invoices are also not in the name of appellant.

I find that in the case of invoices issued by M/s. Studio Corallete, Jones Lary, Gurgoan and M/s. Sandalwood, Gurgaon, the invoices are not in the name of appellant, therefore, I hold that as per rule 9(2) of Cenvat Credit Rules, appellant is not entitled to take Cenvat Credit on the strength of these facts. Therefore, Cenvat credit of Rs. 51,120/- is denied.

4. As I find that in the case of Music Broadcast Pvt. Ltd., Cenvat credit is sought to be denied by the learned Commissioner (Appeals) on the premise that appellant was not registered at the time of issuance of invoices, I find that said issue has been dealt by the Tribunal in the case of Imagination technologies India P. Ltd [2011 (23) STR 661 (Tri-Mum)] wherein this Tribunal has held that as under

5.?I have carefully considered the rival submissions. As regards the claim of CENVAT Credit on the input service received prior to the registration by the appellant, as pointed out by the appellant there is no provision in the CENVAT Credit Rules specifically prohibiting availment of CENVAT Credit in respect of inputs/input service which have been received prior to their registration as an output service provider. So long as they can establish that they have borne the incidence of duty on the inputs/input services and they have utilized the same in providing taxable output services, they are eligible for the tax credit on the inputs/input services. I also find that the very same issue was considered by this Tribunal in the order dated 18-8-2000 and relevant abstract from the said order is given below;-

6.1?On careful examination of the records and submissions made by both sides, I find that there are two issues in this case-

1. Whether the appellants are entitled for CENVAT credit availed by them prior to registration or not?

2. Whether the penalties under various Sections of the Finance Act, 1944 are leviable on the appellants in the facts and circumstances of the case?

6.2?With regard to the issue No. 1, it is clear from the Service Tax Credit Rules, 2002 that the appellants are entitled for input service credit and further as per CENVAT Credit Rules, 2004 which took the part of CENVAT Credit rules, 2002 holding that the CENVAT Credit is available on input and input service both with effect from 10-9-2009. In the provisions of law relating to service tax, nowhere it is mentioned that the CENVAT Credit is not available prior to registration. In fact CENVAT credit Rules clarifies that the assessee is available for CENVAT Credit which is applicable to them within the provisions of CENVAT Credit Rules, 2004 or Service Tax Credit Rules, 2002. Accordingly, the learned DR also agreed that CENVAT credit is available to the appellant with effect from 10-9-2004 when the CENVAT Credit Rules, 2004 came into force but I find in this case the Service Tax Credit Rules, 2002 were also in force prior to 10-9-2004 and the appellant is entitled for entire service tax credit of Rs. 34,113/- availed by them. Accordingly, the issue No. 1 is settled in favour of the appellants.

From the above order it is clear that CENVAT Credit cannot be denied for the period prior to registration by an assessee and I completely agree with the above decision.

5. Therefore following the precedent decision of this Tribunal, although the appellant was not registered with the service tax department during the relevant time it has availed the services, the appellant is entitled to take Cenvat credit.

6. During the course of arguments, learned AR also pointed out the date of invoice does not match with date of invoices as mentioned in the show cause notice. I find that appellant has produced the copy of invoices before me and before the lower authorities also. The and lower authorities have taken note of that, therefore, it is not coming out from where the date 5.5.08 has been noted in the show cause notice, the argument of learned AR that date of invoice is not matching is not acceptable as same has been verified by the learned Commissioner (Appeals) in his order.

7. With regard to the invoices issued by Mindz Eye , Lucknow, I find that neither in the show cause notice nor in the impugned order, it has been disputed that appellant has not availed inputs service and has not paid service tax. Therefore by following the decision of Imagination Technologies India P Ltd. (supra) wherein this Tribunal has held as

6.?As regards the second issue regarding denial of CENVAT Credit on account of not indicating registration number of the input service provider on the invoices, this issue also has been settled by the decision of this Tribunal in the case of Secure Meters Ltd. (supra). In the said order, it was held that credit cannot be denied on the basis of invoices wherein registration numbers were not mentioned so long as the payment of tax was established and the said input service was utilized in the provisions of output service. In the instant case as can bee seen from the order of the adjudicating authority the receipt of the service, its utilization and payment for the service are clearly established from the records maintained by the party and produced before the adjudicating authority. Therefore, in deference to the judgment cited above, I am of the view that the appellant is eligible for the amount of service tax credit and consequent refund in respect thereof.

I hold that appellant is entitled to take Cenvat credit.

As no malafide have been proved against the appellant, the penalty is also not imposable, the same is set aside. In these terms, appeal is disposed of.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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