Custom, Excise & Service Tax Tribunal
Vodafone Idea Limited vs Meerut-I on 17 December, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.70350 of 2016
(Arising out of Order-in-Original No.1-2/ST/PR.COMMR./MRT/2016 dated
14/01/2016 passed by Commissioner of Customs, Central Excise & Service
Tax, Meerut)
M/s Vodafone Mobile Services Ltd., .....Appellant
(135/1 & 137/1, Mangal Pandey Nagar,
University Road, Meerut-250001)
VERSUS
Commissioner of Customs, Central Excise &
Service Tax, Meerut ....Respondent
(Mangal Pandey Nagar, Meerut-250004) APPEARANCE:
Shri Atul Gupta, Advocate for the Appellant Shri Manish Raj, Authorised Representative for the Respondent CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.70858/2024 DATE OF HEARING : 03 September, 2024 DATE OF PRONOUNCEMENT : 17 December, 2024 SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Original No.1- 2/ST/PR.COMMR./MRT/2016 dated 14/01/2016 passed by Commissioner of Customs, Central Excise & Service Tax, Meerut. By the impugned order following has been held:-
"ORDER
(i) I disallow the CENVAT credit wrongly avalled and confirm the demand of CENVAT credit of Central Excise duty/ Service Tax of Rs.14,98,45,423/- (Rupees Fourteen crore Ninety Eight Lakh Forty Five thousand Four hundred Twenty Three only) for the period April 2009 to March 2013 (1 show cause notice dated 06.08.2014), along with Service Tax Appeal No.70350 of 2016 2 Interest under Rule 14 of the CENVAT Credit Rules, 2004 read with proviso to Section 73(1) and Section 75 respectively of the Finance Act, 1994;
(ii) I disallow the CENVAT credit wrongly availed and confirm the demand of CENVAT credit of Central Excise duty/ Service Tax of Rs.2,12,82,576/- (Rupees Two crore Twelve lakh Eighty Two thousand Five hundred Seventy Six only) for the period April'2013 to March 2014 ( 2nd show cause notice dated 20.04.2015), under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 73(1) and Section 75 respectively of the Finance Act, 1994;
(III) Since out of an amount of Rs.14,98,45,423/- (Rupees Fourteen crore Ninety Eight Lakh Forty Five thousand Four hundred Twenty Three only) ( 1st show cause notice dated 06.08.2014), the CENVAT credit wrongly availed for the period April'2009 to March 2013, confirmed at Para 16(1) above, an amount of Rs.93,192/- (Rs.13492/- + Rs.1700/ (Rs13492/-+ Rs.1700/- + Rs.78,000/-) (Rupees Ninety Three thousand One has already been reversed by the party along with Interest of 75,421/-(Rs.5479/-
+Rs.1,283/- +Rs.68,659/-) (Rupees Seventy Five thousand Four hundred Twenty one only), I order for appropriation of the said amount and interest against the demand confirmed at Para 16(i) above for the period April'2009 to March'2013 as discussed in Para 15.7 to 15.9 above;
(iv) I drop the demand of CENVAT credit of Rs.2,48,41,496/- (Rupees Two crore Forty Eight Lakh Forty One thousand Four hundred Ninety Six only) of the period April'2009 to March 2013 (1st show cause notice dated 06.08.2014) and of Rs.1,87,15,502/- (Rupees One crore Eighty Seven Lakh Fifteen thousand Five hundred Two only) of the period April 2013 to March 2014 (2nd show cause notice dated. 20.04.2015);
Service Tax Appeal No.70350 of 2016 3
(v) I impose a penalty equal to hundred percent of the CENVAT credit wrongly availed i.e. Rs.14,98,45,423/-] (Rupees Fourteen crore Ninety Eight Lakh Forty Five thousand Four hundred Twenty Three only) (1st show cause notice dated 06.08.2014 covering the period April'2009 to 07.04.2011 (FY 2009-10 & 2010-11), confirmed at Para 16(1) above, on the noticee under Rule 15 of the CCR, 2004 ibid read with sub-rule 1 of Section 78 of the Finance Act, 1994 [substituted by the Finance Act, 2015 (w.e.f. 14.05.2015)] as CENVAT credit of service tax has been availed by suppression of facts and contraventing the provisions of Rule 2, 3 & Rule 9 of the CCR, 2004 ibid with intent to evade payment of service tax as discussed in Para 15.6 above;
(vi) I impose a penalty equal to Ten per cent of the CENVAT credit wrongly availed [i.e. 10% of Rs.2,12,82,576/- i.e. Rs.21,28,258/-] i.e. Rs.21,28,258/- (Rupees Twenty One Lakh Twenty Eight thousand two hundred Fifty Eight only) (2nd show cause notice dated 20.04.2015 covering the period April'2013 to March, 2014 (FY 2013-14), on the noticee under Rule 15 of the CCR, 2004 ibid read with Section 76 of the Finance Act, 1994 [Section 76 substituted by the Finance Act, 2015 (w.e.f. 14.05.2015)] as CENVAT credit of service tax has been wrongly availed contravening the provisions of Rule 2, 3 & Rule 9 of the CCR, 2004 ibid as discussed in Para 15.10 above;"
2.1 Appellant is engaged in providing Telecommunication Services and are also availing Cenvat credit as admissible under the provisions of Cenvat Credit Rules, 2004. 2.2 During the course of audit of the records of appellant, it was observed that appellant had availed Cenvat credit to the tune of Rs.17,46,86,919/- Which was inadmissible to them during the period from April, 2009 to March, 2013. The year-
Service Tax Appeal No.70350 of 2016 4 wise detail of such wrongly availed credit is as per the chart bellow:-
Chart-A Period Credit availed for the services utilized at unregistered premises (Rs.) 2009-10 6,81,050.00 2010-11 2,05,51,912.00 2011-12 0 2012-13 0 Sub 2,12,32,962.00 Total Chart-B Period Credit availed for the rent paid for unregistered premises (Rs.) 2009-10 5,88,940.00 2010-11 6,17,846.00 2011-12 0 2012-13 0 Sub 12,06,786.00 Total Chart-C Period Credit availed for the health checkup of new recruiter (Rs.) 2009-10 0 2010-11 1700.00 2011-12 0 Mobi 2012-13 0 Sub 1700.00 Total Chart-D Period Credit taken on the Xerox copy of invoices (Rs.) 2009-10 49,70,692.00 2010-11 67,39,320.00 Sub Total 1,17,10,012.00 Chart-E Period Credit availed on improper documents (Rs.) 2009-10 3,14,13,861.00 Sub Total 3,14,13,861.00 Chart-F Period Credit availed on the invoices in respect of Club Membership (Rs.) 2009-10 78,000.00 2010-11 0 2011-12 0 2012-13 0 Sub Total 78000.00 Chart-G Period Expenditure Rate of Service Tax Credit Taken on Service Tax Appeal No.70350 of 2016 5 on AMC including Cess AMC Charges.(Rs.) 2009- 15,91,359.00 10.30% 1,63,910.00 10 2010- 18,51,241.00 10.30% 1,90,678.00 11 2011- 20,74,437.00 10.30% 2,13,667.00 12 2012- 12,83,337.00 12.36% 1,58,620.00 13 Sub 7,26,875.00 Total Chart-H Period Credit availed on Event Management/ Mandap Keeper (Rs.) 2009-10 2,05,872.00 2010-11 4,93,216.00 2011-12 8,71,041.00 2012-13 13,74,079 Sub Total 29,44,208.00 Chart-I Period Credit availed on debit note/demand note/ credit note (Rs.) 2009-10 10,53,59,473.00 Sub Total 10,53,59,473.00 Chart-J Period Credit of Service Tax availed while Service Tax was not actually charged (Rs.) 2009-10 11,278.00 Sub 11,278.00 Total Chart-K Period Credit of Service Tax availed while Service Tax was not actually charged (Rs.) 2009- 1,764.00 10 Sub 1,764.00 Total 2.3 Show cause notice dated 06.08.2014 was issued to the appellant asking them to show cause as to why-
(1) "Cenvat credit of Service Tax amounting to Rs.
17,46,86,919.00 (Rupees Seventeen Crore Forty Six Lakh Eighty Six Thousand Nine Hundred and Nineteen only) wrongly avalled on Input services, las mentioned in the foregoing paras, during the period from 2009-10 to 2012- 13, should not be demanded and recovered from them Service Tax Appeal No.70350 of 2016 6 under Rule 14 of Cenvat Credit Rules, 2004 read with proviso to section 73(1) of the Finance Act, 1994. As the party has already deposited an amount of Rs.13,492.00, the same should not be appropriated against the above demand and remaining amount should not be demanded and recovered.
(2) Interest on Cenvat credit amounting to Rs. 17.46.86.919.00, wrongly avalled by them should not be demanded and recovered from them under Rule 14 of Cenvat Credit Rules, 2004 read with Section 75 of Finance Act, 1994.
(3) Penalty under Rule 15 of the Cenvat credit Rules 2004 read with Section 78 of Finance Act, 1994 should not be imposed upon them."
2.4 Subsequently, for the period April 2013 to March, 2014 another show cause notice dated 24.04.2015 was issued to the appellant on the same grounds for disallowing the Cenvat credit as per table bellow:-
[Figure in Rupees] S. Period Description/input service Amount of No. inadmissible Cenvat Credit
1. 2013- Cenvat credit taken on AMC 1,74,39,814.00 14 [Expenditure Rs.14,24,39,543.00]
2. 2013- Cenvat Credit taken on Event 12,75,688.00 14 Management/ Mandap Keeper
3. 2013- Cenvat credit taken on debit note/ 2,12,82,576.00 14 demand note/ credit note TOTAL 3,99,98,078.00 2.4 Both the show cause notices were adjudicated as per the impugned Order-in-Original referred in para-1 above. 2.5 Aggrieved appellant have filed this appeal. 3.1 We have heard Shri Atul Gupta learned Counsel appearing for the appellant and Shri Manish Raj learned Authorized Representative appearing for the revenue.
4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument.
Service Tax Appeal No.70350 of 2016 7 4.2 We find that the issue involve in the present case is not res-integra, issue-wise decisions allowing the credit on the same facts are reproduced below:-
Issue 1: CENVAT Credit disputed on invoices, which were showing billing address of Ahmedabad Office though POs clearly mentioned the services were used by the Appellant. Mportal India Wireless Solutions Pvt Ltd [2012 (27) STR 134 (Kar.)] Well Known Polyesters Ltd [2012 (25) STR 411 (Tri. -
Ahmd.)] etc. Issue 2: CENVAT Credit availed for the rent paid for unregistered premises.
Samsung India Electronics Pvt. Ltd. [2017 (52) STR 497 (Tri.-All.) affirmed at 2017 (52) STR J253 (All)]. All spheres Entertainment Pvt. Ltd. [2016 (41) STR 104 (Tri.-Del.)] GE India Exports (P) Ltd. [2016 (44) STR 693 (Tri.-Hyd.)] ABM Knowledge Ltd. [2019 (27) GSTL 694 (Tri.-Mum)]. Issues 3 and 4: CENVAT Credit taken on Xerox copy of invoices and similar documents termed as improper documents.:-
Steelco Gujarat Ltd [2010 (255) ELT 518 (Guj.)] Ispat Industries Ltd [2005 (184) ELT 36 (Tri.- Mum.)] Ceeky Daikin Ltd. [2005 (191) ELT 740 (Tri.-Del.)] Hira Steels Ltd. [2011 (273) ELT 370 (Chhattisgarh)] Issue 5: CENVAT Credit availed on debit notes/demand notes/credit notes.
(i) By Order-in-Original No.56/ST/RN/Idea/MII/13-14 dated 30.05.2014 in the case of appellant's Mumbai unit, Commissioner has dropped the demand observing as follows:-
"17. I refer to the contents of Rule 9 of Cenvat Credit Rules, 2004, during the relevant period and the same is reproduced below:
"Rule 9. Documents and accounts.- (1) The CENVAT credit shall be taken by the manufacturer or the Service Tax Appeal No.70350 of 2016 8 provider of output service or input service distributor, as the case may be, on the basis of any of the following documents, namely :-
(a) an invoice issued by-
(i) a manufacturer for clearance of -
(I) inputs or capital goods from his factory or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer;
(II) inputs or capital goods as such;
(ii) an importer;
(iii) an importer from his depot or from the premises of the consignment agent of the said importer if the said depot or the premises, as the case may be, is registered in terms of the provisions of Central Excise Rules, 2002;
(iv) a first stage dealer or a second stage dealer, as the case may be, in terms of the provisions of Central Excise Rules, 2002; or
(b) a supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in terms of the provisions of Central Excise Rules, 2002 from his factory or depot or from the premises of the consignment agent of the said manufacturer or importer or from any other premises from where the goods are sold by, or on behalf of, the said manufacturer or importer, in case additional amount of excise duties or additional duty leviable under section 3 of the Customs Tariff Act, has been paid, except where the additional amount of duty became recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful misstatement or suppression of facts or Service Tax Appeal No.70350 of 2016 9 contravention of any provisions of the Excise Act, or of the Customs Act, 1962 (52 of 1962) or the rules made there under with intent to evade payment of duty.
Explanation-For removal of doubts, it is clarified that supplementary invoice shall also include challan or any other similar document evidencing payment of additional amount of additional duty leviable under section 3 of the Customs Tariff Act; or (bb) a supplementary invoice, bill or challan --- [inserted by Notification No.13/2011-CE (NT), dated 31-3-2011];
( c) a bill of entry; or
(d) a certificate issued by an appraiser of customs in respect of goods imported through a Foreign Post office; or
(e) a challan evidencing payment of service tax - [inserted by Notification No.18/2012-CE (NT), dated 17-3-2012]; or
(f) an invoice, bill or challan issued by a provider of input service on or after the 10th day of September,2004;or
(g) an invoice, bill or challan issued by an input service distributor under Rule 4 A of the Service Tax Rules,1994.
Provided that the credit of additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act,1975 (51 of 1975) shall not be allowed if the invoice or the supplementary invoice, as the case may be, bears an indication to the effect that no credit of the said additional duty shall be admissible;] [(2) No CENVAT credit under sub-rule (1) shall be taken unless all the particulars as prescribed under the Central Excise Rules,2002 or the Service Tax Rules,1994, as the case may be, are contained in the Service Tax Appeal No.70350 of 2016 10 said document: Provided that if the said document does not contain all the particulars but contains the details of duty or service tax payable, description of the goods or taxable service {substituted by Notification No.19/2007-CE (NT), dated 9-3-2007- [assessable value, Central Excise or Service Tax Registration Number of the person issuing the invoice, as the case may be]----and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or services covered by the said document have been received and accounted for in the books of the account of the receiver, he may allow the Cenvat credit----"
17.1 I find that Rule 9 of Cenvat credit Rules, 2004 lays down the provisions for availment of Cenvat credit only on the basis of documents specifically prescribed in sub-Rule (1) of Rule 9. Such documents should contain certain information in order to make it a valid document for availing Cenvat credit. However, as per sub-Rule (2) of Rule 9, it is clarified that if all the required information is not contained in such documents but contain basic information and Deputy Commissioner/Assistant Commissioner satisfied that services or goods mentioned in such documents is actually received and accounted for in the books of account, then in that case Cenvat credit may be allowed.
17.2 I find that Sub Rule (5) of Rule 3 of Cenvat Credit Rules, 2004 refers to invoice in Rule 9 of Cenvat Credit Rules, 2004. The 'invoice' referred in Rule 9 is either invoice issued by manufacturer i.e., as per Rule 11 of Central Excise Rules, 2002 or invoice mentioned in clause
(f) of Rule 9(1) of Cenvat Credit Rules, 2004. Infact Rule 9 does not specifically refer to a particular kind of invoice to be issued by the provider of output service when he clears the Capital goods as such on which credit was taken Service Tax Appeal No.70350 of 2016 11 earlier. Therefore, invoice referred in Rule 3 (5) of Cenvat Credit Rules, 2004 can be taken as the invoice as per Rule 11 of Central Excise Rules, 2002 or invoice issued as per Rule 4 A of Service Tax Rules, 1994.
18. Now, I refer to provisions of Rule 4 A of Service Tax Rules, 1994, applicable to service provider which are as under:
"Rule 4A. Taxable service to be provided or credit to be distributed on invoice, bill or challan-
(1) Every person providing taxable service shall not later than fourteen days from the date of completion of such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier issue an invoice, a bill or, as the case may be, a challan signed by such person or a person authorized by him in respect of taxable service provided or to be provided and such invoice, bill or, as the case may be, challan shall be serially numbered and shall contain the following, namely-
(i) the name, address and the registration number of such person;
(ii) the name and address of the person receiving taxable service;
(iii) description, classification and value of taxable service provided or to be provided; and
(iv) the service tax payable thereon....."
19. Since the goods involved are Capital goods, I quote the contents of Rule 11 of Central Excise Rules, 2002, as below:
"RULE 11. Goods to be removed on invoice. -- (1) No excisable goods shall be removed from a factory or a warehouse except under an invoice signed by the owner of the factory or his authorized agent and in the case of cigarettes, each such invoice shall also be countersigned by the Inspector of Central Excise or the Superintendent of Central Excise before the cigarettes are removed from the factory:
Service Tax Appeal No.70350 of 2016 12 Provided that a manufacturer of yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60 or readymade garments falling under Chapter 61 or 62 of First Schedule to the Tariff Act may remove the said goods under a proforma invoice signed by him or his authorized agent. The provisions of sub-rules (2) to (5) shall apply to the proforma invoice except that the said invoice shall not contain the details of the duty payable. The manufacturer shall, within five working days from the issuance of the proforma invoice prepare the invoice in terms of this rule after making adjustments in respect of the goods rejected and returned by the buyer. The proforma invoice and the invoice issued in terms of this sub-rule shall have cross reference to each other by way of their serial numbers: Provided further that the said period of five working days, as referred to in the first proviso, may be extended upto a period not exceeding twenty-one days, inclusive of the said period of five working days, by the Commissioner of Central Excise, on receipt of a request from the said manufacturer.
(2) The invoice shall be serially numbered and shall contain the registration number, address of the concerned Central Excise Division, name of the consignee, description, classification, time and date of removal, mode of transport and vehicle registration number, rate of duty, quantity and value, of goods and the duty payable thereon. Provided that in case of a proprietary concern or a business owned by Hindu Undivided Family, the name of the proprietor or Hindu Undivided Family, as the case may be, shall also be mentioned in the invoice. (3) The invoice shall be prepared in triplicate in the following manner, namely:-
Service Tax Appeal No.70350 of 2016 13
(i) the original copy being marked as ORIGINAL FOR BUYER;
(ii) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER;
(iii) the triplicate copy being marked as TRIPLICATE FOR ASSESSEE.
(4) Only one copy of invoice book shall be in use at a time, unless otherwise allowed by the Assistant Commissioner of Central Excise, or the Deputy Commissioner of Central Excise, as the case may be, in the special facts and circumstances of each case.
(5) [* *i Omitted (6) Before making use of the invoice book, the serial numbers of the same shall be intimated to the Superintendent of Central Excise having jurisdiction. (7) The provisions of this rule shall apply mutatis mutandis to goods supplied by a first stage dealer or a second stage dealer:
Provided that in case of the first stage dealer receiving imported goods under an invoice bearing an indication that the credit of additional duty of customs levied on the said goods under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be admissible, the said dealer shall on the resale of the said imported goods, indicate on the invoice issued by him that no credit of the additional duty levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible; Provided further that in case of the second stage dealer receiving imported goods under an invoice bearing an indication that the credit of additional duty of customs levied on the said goods under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be admissible, the said dealer shall on the resale of such imported goods, indicate on the invoice issued by him that no credit of the Service Tax Appeal No.70350 of 2016 14 additional duty levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible. Explanation. - For the purposes of this rule, "first stage dealer" and "second stage dealer" shall have the meanings assigned to them in CENVAT Credit Rules, 2002." 19.1 Rule 11 of Central Excise Rules, 2002 and Rule 4 A of Service Tax Rules, 1994 lay down the contents of the document known as "Invoice" having an statutory force behind it.
20. The certified copies of debit notes submitted by the Noticee have been verified and examined. On examination, it is found that the said debit note contains debit note number, date of issue, details of the person/company to whom issued, details for which debit note is issued, Value of the capital goods, Cenvat amount, Service Tax registration No., TIN No., and address of Service provider as well as Service receiver. The said debit note is found to be signed by the authorized signatory of the company. The above shows that the debit notes in question carry the essential specifications as mentioned under Rule 9 of Cenvat credit Rules, 2004 and Rule 4 A of Service Tax Rules, 1994.
21. In the above situation a credit of duty shown in the document cannot be denied just because a document is named debit note' particularly when the duty paid character or the use of Capital goods is not challenged in SCN. The only ground taken for denying credit in SCN was that credit was taken on debit notes which were not specified document under Rule 9 of Cenvat Credit Rules, 2004. It has been well settled law under Central Excise that the substantial benefit of Cenvat Credit cannot be denied on procedural grounds.
21.1 In case of CCE Nashik Vs M/s. Graphite (I) Ltd., [2007 (212) ELT 54 (Tri)], the CESTAT held that hyper technicalities should not be made for the basis of Service Tax Appeal No.70350 of 2016 15 disallowing the Cenvat credit. Further, in the following cases the CESTAT has allowed credit on debit notes:
(1) Shree Cements Ltd., Vs CCE, Jaipur [2013 (29) STR (Tri.Del)], and (2) Pharmalab Process Equipments Pvt.Ltd, [2009 (242) ELT 467 (Tri)].
22. Relying upon the above judgments of CESTAT, I hold that the proposal for disallowing credit taken on debit notes does not stand. Since the demand itself does not stand, there is no question of interest and penalty. Therefore, the impugned Show Cause Notice is not sustainable."
(ii) Further, by Order-in-Original No. 51-55/STC-IV/MRRR/16- 17 dated 31.05.2016 in the case of appellant's Mumbai unit, Commissioner has dropped the demand observing as follows:-
"25.3 Thus from a combined reading of the above provisions, I find that a document issued by a service provider containing the details like Serial Number, the name, address ,the registration number of the person providing the service, the name and address of the person receiving taxable service, description, classification, value of taxable service provided and the service tax payable thereon, can be considered as a valid document for availment of Cenvat credit. The noticee submitted sample copies of the debit noted issued by M/s GTL Infraon which the Cenvat Credit has been availed by them. The details available on one such Debit note dated 15/2/2011 issued by M/s GTL infrastructures are as follows:
Debit Note Serial Number: - GIL/E/DB/6305/I 0-1 I Debit Note Date: - 15.03.2011 The name, address & the registration number of the person providing the service:-
GTL Infrastructure Ltd.
Regd Off. Maestros House, MIDC Building No-2, Sector-2, Millenium Business Park, Service Tax Appeal No.70350 of 2016 16 Mahape, Navi Mumbai, Service Tax Registration No. AACCG2107KST009 The name and address of the person receiving taxable service:-
Idea Cellular Ltd.
3rd floor, Windsor Bldg, Kalina, CST Rd, Santacruz (E), Mumbai-400098 Description: -Charges for the month of 01-Nov-2010 to 3 1-Nov-2010 Diesel(Diesel charges) Electricity (Electricity charges)- Classification:-Business Auxiliary Service Value of taxable service provided and the service tax payable thereon: -
Diesel(Diesel charges)-31594.63 Electricity (Electricity charges)-99628.33 Service Tax Debit (@10%)-13122.29 Education Cess Debit(@2%)-262.43 Secondary and Higher Edu Cess(@1%)-131.21 25.4 From the above. I find that the debit notes issued by the vendor contains all the relevant details as prescribed/required under Rule 4A of Service Tax Rules, 1994 and hence qualifies as a specified document for availing Cenvat Credit under Rule 9 of Cenvat Credit Rules, 2004.Thus I hold that debit notes on which Cenvat credit has been taken by the noticee are valid documents for availing the Cenvat Credit and hence the allegation made in the show cause notices that debit notes is not an specified document to avail Cenvat credit, is not justifiable and required to be set aside."
(iii) By Order-in-Original No.74/STC-IV/MRRR/16-17 dated 30.06.2016 of Commissioner Service Tax IV Mumbai, demand on similar issues has been dropped by observing as follows:-
"16. Submission in respect of the CENVAT credit availed on debit notes.
Service Tax Appeal No.70350 of 2016 17 a. CENVAT credit shall be allowed on basis of debit notes raised by service provider It will be evident from the above submissions that the company has entered in to agreement with various service providers for obtaining the service of passive telecom infrastructure. Para 8.2 and 8.3 of the agreement provides for manner of charging. The service provider raises invoices for the purpose of recovering the amount for the services provided by him as under :
1. infrastructure professional fees: The invoice is raised for this amount for providing passive infrastructure.
2. Site operation service fees: The amount represents the fees in respect of operations carried out on the site.
3. Reimbursement of expenses towards electricity and diesel: The service provider is required to use electricity and diesel for providing the services of site operations. The electricity and diesel-are-inputs for the services, Since, the amount recovered from the company for electricity and diesel is based on actual consumption, these amounts are recovered through debit notes.
17. It will be evident from the above that all the above charges are recovered from the company for providing passive infrastructure. The entire amount is consideration for the said services and the company has not paid for procuring diesel or electricity. Hence they submitted that the company is entitled to the credit of service tax paid on all charges paid by the Company.
18. Rule 9(1) specifies the documents on the basis of which credit is available. The clause (I) specifies 'invoice', 'bill' or 'challan' issued by provider of input service on or after the 10th day of September 2004 and the meaning of the word 'invoice' or bill' or challan is as follows-
Meaning of the word 'Invoice'
--As defined by The Chambers Dictionary, a word 'invoice' means -
Service Tax Appeal No.70350 of 2016 18 a letter of advice of the dispatch of goods, with particulars of their price and quantity to list (goods) on an invoice; to send an invoice to a customer.
--As defined by 'Oxford Dictionary' a word 'invoice' means-
a list of goods or services rendered, with prices and charges; a bill i.e. 1. make an invoice of (goods and services), 2. send an invoice to (a person)
--As defined by Tire Law Lexicon' dictionary a word invoice' meansa particular account of merchandize to another merchant with its value, custom, and charges etc. sent by a merchant to his factor or correspondent.
--As defined by "Black's Law Dictionary' award 'invoice' means-
A written account, or itemized statement of merchandise shipped or sent to a purchaser, consignee, factory, etc. with the quantity, value or prices and charges annexed, and may be as appropriate to a consignment or a ,r-morandum shipment as it is to a sale.
Document showing details of a sale or ply-chase transaction. A list sent to a purchaser, factor, consignee, etc. containing the items together with the price and charges of merchandise sent to be sent to him. A writing made on behalf of an importer, specifying the merchandise imported, and its true cost or value.
Meaning of the word "bill"
-- As defined 0 'Oxford Dictionary' a word "bill" means-
Statement of charges for goods supplied or services rendered, the amount owed,
-- As defined by "Black's Law Dictionary' a word "bill" means -
Service Tax Appeal No.70350 of 2016 19 written statement of the terms of a contract, or specification of the items of a transaction or of a demand. Also a general name for any item of indebtedness, whether receivable or payable; an account for goods sold, services rendered, or wont done. As a verb, as generally and customarily used in commercical transactions; "bill" is synonymous with "charge" or "invoice"
19. It is evident from the same that the bill is raised for recovery of the amount for goods or services supplied by the person raising the bill. It represents the amount payable by the person on whom the invoice or bill is raised. The documents raised by the service provider may be titled as debit not; but serves the same purpose of invoice or bill. The company is liable to pay to the service provider based on the debit notes raised by them. 20. The rule 4A of the Service Tax Rules 1994 provides that every person providing the taxable service shall issue an invoice or bill or challan signed by such person or authorized person on taxable service provided. The authorities at the service provider's end have considered the said document as complying with the provisions of rule 4A. The service tax was also collected and paid based on the said document. the credit of the same cannot be denied at the receivers end on the ground that, it is not a specified document.
21. Further, they submitted that during the relevant time, the rule 4A provided that the invoice or bill shall contain the following information.
"(i) the name, address and the registration number of such person;
(ii) the name and address of the person receiving taxable service;
(iii) description, classification and value of taxable service provided or to be provided;
and Service Tax Appeal No.70350 of 2016 20
(iv) the service tax payable thereon. "
22. They referred to debit notes raised by GTL Infrastructure Ltd and submitted that it indicates the description of service, amount of Service tax, Education cess, and Higher & Secondary Education Cess, Service Tax Registration No. AACCG2107KST009, Service tax category of 'Business Auxiliary service', address of the service recipient i.e. Spice Telecommunication Ltd., C-I05, Industrial Area, Phase - VII, SAS Nagar, Mohali, Punjab - 160 055 on the debit notes. Thus it contains all the information specified under rule 4A in as much as it contains service tax registration number, amount of service tax payable, name of the service recipient, nature of services provided etc, and therefore the credit of the same shall not be denied.
23. They relied upon the following judgments wherein it has been provided that CENVAT credit can be taken on the basis of debit notes if the same contains the details regarding service tax, nature of service, registration no. i. Commissioner Of C. Ex. Indore Versus Gwalior Chemicals Industries Ltd. 2011 (274) E.L.T. 97 (Tr:. - Del.) "CENVAT
- Duty paying document - Service tax credit on the basis of debit notes cum-bill issued by service provider - Debit notes coal-bill contain all requisite information as per provisions of Rule 9(I) of CEN V AT Credit Rules, 2004, hence, are in nature of invoices - Credit not deniable. [pares 4, 5)"
ii. Commissioner Of Central Excise, Indore Versus Grasim Industries Ltd. 2011 (24) S.T.R. 691 (Tri. - Del.) "CENVAT credit of Service tax Duty paying documents - Debit notes issued by service provider - Impugned order cEseloses that said debit notes contain all the details required to be mentioned in the invoice except for its name - Debit notes issued by the service provider can be treated as invoice - CENV AT credit availed on the basis of debit notes, Service Tax Appeal No.70350 of 2016 21 admissible -Rule 9 of CENVAT Credit Rules, 2004. [2009 (239) E.L. T.39S (P & H) distinguished]. (Para 4), iii. Pharmalab Process Equipments Pvt. Ltd. 2009 (242) ELT 467 (T) "4. Commissioner (Appeals) also has taken the same view.
However, from the copies of debit notes submitted during the hearing I find that the debit notes issued by the service provider contained the details of service tax payable, description of the taxable service (sales commission), value of the taxable service, registration no. of the service provider, name and address of the service provider. These are the details which are required as per Rule 9(2) of CENVAT Credit Rules, 2004.The observations of the Assistant Commissioner are contrary to the facts noticed by me on the basis of documents submitted before me. Since it is not clear as to whether the same documents which were produced before me were produced before the Assistant Commissioner or not, the matter has to go back to the Assistant Commissioner who shall go through the documents, verify whether service has been received and whether all the particulars as required under the Rules are available in the debit notes and adjudicate the matter afresh. If documents contain details requited under Rule-98 (sic) P(2)7 of CENVAT Credit Ruler Benefit of Service Tax Credit maybe extended: Needless to say the appellants shall be given inopportunity to present their case and also the Assistant Commissioner shall be free to get any verification if necessary done." iv. Pallipalayam Spinners (P) Ltd. 2010-TIOL-1723-CESTAT
--MAD "2. I have carefully considered the rival submissions and find no warrant to interfere with the impugned order and it is, based upon the Tribunal's decision in the case of Pharmalab Process Equipments Pvt. Ltd. V.v. CCE, Ahmedabad - 2009 (242) ELT 467 (Tri.-Altmll = (2009- TIOL-2215-CESTAT-AHM), holding that once the details Service Tax Appeal No.70350 of 2016 22 required under Rule 9(2) of the CENVAT Credit Rules, 2004, are shown in the documents such as debit notes 011 the strength of which the company's took credit, there was no ground for denial of substantive right to credit .The same view has been taken by the Tribunal in the company's own case as seen from Final Order No.463110 dt. 21.04.10 and Final Onder No. 694110 dt. 24.06.10. In those cases, the issue was remanded for the purpose of examining whether the debit notes contained all the requisite particulars for the purpose of availment of credit. However, this case does not warrant any remand for the reason that it is an admitted position that all the details required under Rule 9 (2) of the CCR,2004, were contained in the documents such as debit notes etc., on the strength of which the company have taken the credit. I, therefore, uphold the impugned order in so far as it relates to extending the credit of Rs. 1,16,634/- and reducing the penalty to Rs.2,000/-.
24. They submitted that CENAT credit is denied to the company on the ground that credit has been availed on the strength of debit notes which is not a specified document under rule 9 of CCR, 2004. It is submitted that Quippo Telecom Infrastructure Ltd. has issued invoices and not debit notes for the reimbursement of diesel and electricity charges. They also submitted specimen copies of the invoices issued by the said vendor. It will be evident from the invoices attached that the caption "invoice" is indicated in tight corner of the document. Thus it will be evident from the above that Quippo Telecom Infrastructure has issued invoices and not debit notes which is specified document under rule 9(1)(f) of the CENVAT credit Rules 2004 for availing the CENVAT credit.. Thus they submitted that the demand in respect of the credit availed on the service tax paid to Quippo needs to be dropped. The total amount of service tax credit availed on the strength of the invoices issued by Quippo Telecom Infrastructure Ltd. is Service Tax Appeal No.70350 of 2016 23 Its. 3,79,19,638/- which is included in the demand of Rs.11,28,86,302/- which needs to be dropped in view of the above submission."
They submitted that when the collection of service tax has been accepted by the department based on the said document. 4.3 Thus, following the ratio of these decisions where these issues has been decided in favour of the appellant, we do not find any merits in the impugned order to the extent of denying the credit on these accounts.
4.4 We also note that appellant has reversed the inadmissible credit as detailed bellow along with interest:-
S.no. Credit Reversed Amount of reversal paid
1. Appellant has reversed the credit availed Rs. 1700 on health check-up services, despite the bona fide belief of the Appellant that the disputed credit is admissible under Rule2(1) read with Rule 3 of CCR.
(regarding FY 2010-11)
2. Appellant has reversed the credit availed Rs. 78,000 along with in respect of club membership services an interest of Rs.
despite the bona fide belief of the 68,659 Appellant that the credit is admissible in respect of the club membership charges paid.
Demand in respect of these has also been confirmed. 4.5 Summarizing-
Except for these two amounts reversed for which demand has been confirmed against the appellant, we do not find any merits in the impugned order.
As we are setting aside the demands on merits of the case, we do not go into the issue of limitation. Penalties imposed under Section 76 and 78 are also set aside.
5.1 Appeal is allowed as indicated herein above.
(Order pronounced in open court on-17 December, 2024) (P.K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp