Custom, Excise & Service Tax Tribunal
Karur Vysya Bank Ltd vs Tiruchirapalli Ce&Amp;St on 22 February, 2019
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Court : DB- B1
ST/373/2012
(Arising out of Order-in-Original No. 2/2012 (Commr.)
dated 28.03.2012 passed by the Commissioner of Central
Excise & Service Tax, Trichy).
M/s. The Karur Vysya Bank Ltd. : Appellant
Vs.
CCE & ST, Trichy : Respondent
Appearance Shri S, Ananthan, Ms. Lalitha Rameswaran, Consultant, for the Appellant Shri A. Cletus, ADC (AR) for the Respondent CORAM:
Hon'ble Shri Madhu Mohan Damodhar, Member (Technical) Hon'ble Shri P. Dinesha, Member (Judicial) Date of Hearing: 10.01.2019 Date of Pronouncement: 22.02.2019 FINAL ORDER No. 40353/2019 Per Bench A Show Cause Notice (SCN) dated 08.03.2011 was issued interalia alleging that the input service tax credit and capital goods cenvat credit was availed by the appellant during 2005- 06 to 2010-11 (upto September 2010) to the tune of 2 Rs.18,02,85,012/-; that while availing the above credit, the assessee had not furnished the cenvat return or abstract or details of the cenvat credit availed, also had not furnished the duty paying documents; that several requests made to the assessee to furnish the duty paying documents but the assessee did not produce any such for compliance with Rule 9 of Cenvat Credit Rules, 2004 (CCR); that the assessee had not filed the cenvat credit return as per Form and in Rule 9(9) of CCR; that the assessee had failed to file cenvat credit return in the prescribed format along with its ST-3 return for the period October, 2005 to September, 2010 as per Rule 9 (9) of CCR and Rule 5 of STR, 2002 and that therefore it appeared to the Revenue that the assessee had availed irregular credit of service tax and capital goods credit without any valid original duty paying documents as per Rule 9 and 4 (7) of CCR, etc.
2. The appellant filed its reply interalia contending that it had filed its ST-3 return and also cenvat credit return based on the cenvat documents; that they had filed Form under Rule 5 (4) along with ST-3 return before the introduction of CCR, 2004 and later, ST-3 return in accordance with CCR, 2004, which was accepted by the Revenue; that they had submitted the required documents before the Excise Audit party and CERA whenever demanded; that there was a clerical error in the quantification of credit amount to the extent of Rs. 77,43,098/-; that upon verification of the appellant's cenvat credit documents, the jurisdictional Assistant Commissioner, Karur, had found that the 3 appellant was eligible to credit amounting to Rs.13,10,41,895/; that they had produced statement of the bills/invoices along with service tax amount involved bill-wise, issued by the service providers to the extent of Rs. 1,69,25,647/- which were misplaced during the shifting of office premises; that with regard to the credit for service tax charged by the National Payments Corporation of India (NPCI) in respect of ATM transactions towards inter-bank services, NPCI had issued e- statements to all banks in the country who were availing credit which was duly furnished; that photocopy of the duty paying documents were furnished for Rs. 15,60,582/- and for the balance of Rs. 7,36,403/-, such documents could not be produced as the same got lost during shifting, etc.
3. The Commissioner- Adjudicating authority took up the adjudication and vide impugned order in Original dated 28.03.2012 has interalia held that the appellant should have filed the cenvat credit return as per Form specified and in Rule 9 (9) of CCR giving the complete details as specified therein; that the assessee had not furnished the Cenvat credit documents for verification that the burden of proof was always on the appellant; that the appellant did not keep the basic documents properly and there was an inordinate delay in producing such documents for verification, etc. He finally concluded that the appellant's claim was correct with regard to credit availment of Rs. 13,10,41,895/- which was also verified by the jurisdictional Assistant Commissioner, he also accepted 4 the excess amount erroneously shown in the worksheet to the extent of Rs.77,43,098/- but, however, confirmed the demand with regard to the balance of Rs. 4,15,00,019/- as ineligible cenvat credit. Aggrieved, the assessee has preferred this appeal.
4. Heard Ld. Consultant, Shri Ananthan, for the assessee and Ld. DR, Shri A. Cletus, ADC, for the Revenue, we have considered the rival contentions, perused the documents as well as orders of the lower authorities placed on record and have also gone through various decisions/orders referred to during the course of the arguments.
I. Cenvat Credit on the e-statement of NPCI 5.1 The appellant is a Banking Company, a Nationalized Bank. NPCI is the brain child of the Reserve Bank of India
created with an objective of encouraging Retail Payment System (RPS) in India to facilitate all the financial institutions, Government, Corporate Sector and Banks along with NBFCs, to access the RPS easily. Most of the Nationalized Banks are members of NPCI. NPCI, as understood, provides intermediary network searching and other supporting services when a transaction is made on ATMs, incorporate such transactions with the Bank account of the respective customers; and is also responsible for accounting the settlement of these transactions between the Member Banks. If a customer having a credit/debit card issued by a bank, transacts with the ATM of 5 that particular bank, or a customer with a particular card transacts with the ATMs installed in other banks, in each of such transactions NPCI assumes the role of facilitating such transactions.
5.2 The appellant being a banking/ banking company, proviso to Rule 4A of the STR,1994, applies, which reads as under:-
4A. Taxable service to be provided or credit to be distributed on invoice, bill or challan - (1) Every person providing taxable service[, not later than [thirty] 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,shall 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 such taxable service provided or [agreed]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 and value of taxable service provided or agreed to be provided; and (iv) the service tax payable thereon. [Provided that in case the provider of taxable service is a banking company or a financial institution including a non-banking financial company providing service [to any person], an invoice, a bill or, as the case may be, challan shall include any document, by whatever name called, whether or not serially numbered, and whether or not containing address of the person receiving taxable service but containing other information in such documents as required under this sub-rule:] 6 The above proviso which cut off from the requirements of Rule 4A, mitigates the conditions in order for a banking company to avail cenvat credit.
5.3 The assessee as a Member Bank, has entered into an agreement with NPCI, wherein, NPCI has agreed to provide intermediary network switching and other support services, as may be required, for accounting and settlement of transactions made on the Automated Teller Machines (ATM) and integrating the same with the accounts of the customers, in the books of the member banks. The said agreement also records that in the event payments are made by one Member bank ATM operated by the appellant to the customers of another bank, then the banks are required to settle such payments made with the member bank who had issued the subject card. In nutshell, the above agreement provides for smooth operation of member banks regarding transaction through credit or debit cards or such other instruments, to the customers who perform transactions through ATMs for specified services. The agreement also provides for the NPCI to raise invoices on member bank and it is that payment made by the appellant for which the NPCI has only issued a e-statement that has triggered the first issue. From a perusal of the statement issued by NPCI, we note that it is a self-contained document incorporating all the mandatory requirements of proviso to Rule 4A and in any case, NPCI is not a private body just to ignore 7 its statement; as to the nature of service, there is an agreement in place.
5.4 It is not the case of the Revenue that NPCI has not filed its ST-3 return or that there was any contravention by NPCI whereby a doubt is entertained as to the transactions, to deny cenvat credit availed by the assessee on its payment to NPCI.
Hence, we are unable to subscribe to the views of the Ld. Commissioner and hence, we are setting aside the same. II. Cenvat on statements of service provider 5.5 With regard to the cenvat credit disallowed for want of bills/invoices for which only the statement given by the service providers were produced, we note that the service providers include private parties which is not as per Rule 9 (2) of CCR, 2004 read with Rule 4A of Service Tax Rules, 1994, lacking even the minimum necessary details. There is no whisper about any agreement with the parties, but, however, considering the fact that the assessee is a banker, we find it appropriate to give one more opportunity to prove its case, by producing bills/invoices and not just invoice of invoices. The assessee should co-operate with the Revenue and it cannot claim any special status by filing appropriate documents.
III. Cenvat on Original Invoices. 5.6 The other issue is the denial of cenvat credit for want of
original invoices. The assessee has furnished the photocopies of the invoices and it is the settled legal position of law that 8 even photocopies of invoices are the valid documents. The following are the case laws relied upon by the assessee in support of its contention:-
1. Shivam Electrical Industries Vs. J & K (HC) 2018 (2) TMI 816
2. Pepsico India Holding Pvt. Ltd. Vs. Cestat, Mumbai 2016 (10) TMI 1091
3. Integra Software Services Pvt Ltd. Vs. Cestat Chen.
2018 (10) TMI 705
4. Minda Sai Ltd. Vs. Cestat Chennai 2018 (1) TMI 164 Denial of cenvat credit on the photocopy of the invoices is not justified and hence the same is set aside.
IV. Cenvat Credit where no documents furnished. 5.7 With regard to denial of balance cenvat credit we find that no documents were furnished and hence we do not propose to interfere with the findings of the lower authority.
6. Appeal is therefore treated as partly allowed, on the above terms.
(Order pronounced in the open Court on 22.02.2019) (P.DINESHA) (MADHU MOHAN DAMODHAR) MEMBER (JUDICIAL) MEMBER (TECHNICAL) BB