Custom, Excise & Service Tax Tribunal
Bayer Material Science Pvt Ltd vs Noida on 21 August, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
REGIONAL BENCH : ALLAHABAD
E/50902/2014-EX[DB]
(Arising out of Order-in-Original No.14/COMMRSSIONER/NOIDA/2013-14
dated 31.10.2013 passed by Commissioner, Central Excise & Service Tax,
Noida.)
M/s. Bayer Material Science Pvt.Ltd.
...APPELLANT(S)
VERSUS
Commissioner of Customs, Central Excise & Service Tax, Noida
RESPONDENT (S)
APPEARANCE Shri Vishal Kumar (Advocate) for the Appellant (s) Shri Pawan Kumar Singh (Supdt.) (A.R.) for the Revenue CORAM:
MRS. ARCHANA WADHWA, HON'BLE MEMBER(JUDICIAL) SHRI ANIL G. SHAKKARWAR, HON'BLE MEMBER(TECHNICAL) DATE OF HEARING : 03.08.2018 DATE OF DECISION : 21.08.2018 FINAL ORDER NO.71971/2018 Per Mrs.Archana Wadhwa :
Vide his impugned order, the lower authorities confirmed the demand of duty of Rs.2,66,61,747/- by denying the Cenvat credit of service tax availed by the assessee on the basis of the invoices issued by M/s.Keil India Engineering Pvt.Ltd., who had provided the construction of factory services to the appellant. The said demand 2 E/50902/2014-EX[DB] pertains to the period April 2007 to December 2009. In addition, penalty of identical amount stand imposed.
2. It is seen that M/s.Keil India Engineering Pvt.Ltd. was registered service provider at their Delhi address. However, in respect of services provided to the present appellant, the same were provided from Noida, which was not registered premises and as per the inquiries made by the Revenue, no Service tax stand deposited by them. In such a scenario, Revenue initiated proceedings against the present appellant for denial of the credit on the sole ground that the service provider has not deposited the same with the Revenue. The appellant during the course of adjudication took a stand that the service provider have raised the invoices showing the value of the services as also the service tax amount separately. The said invoices also have the proper address and registration number of the service provider. Based upon the same, the appellant have taken the credit and if the service provider has not deposited the service tax with the Revenue, the Revenue's remedy lies at the end of service provider, for recovery of the non-paid service tax.
3. The said submissions were not appreciated by the lower authorities, who confirmed the demand alongwith imposition of penalty. Hence the present appeal.
4. The ld.Advocate appearing on behalf of the appellant has drawn our attention to the findings of the adjudicating authority, which are solely based upon the fact that M/s. Keil India Engineering Pvt.Ltd. has not paid the Service Tax and as such the appellant cannot avail the 3 E/50902/2014-EX[DB] benefit of the Cenvat credit of duty. Ld.Advocate submits that the fact that M/s. Keil India Engineering Pvt.Ltd. has not deposited the duty was not in their knowledge and there is no allegation of any collusion etc. by the Revenue. It was the duty of M/s. Keil India Engineering Pvt.Ltd. to pay the Service Tax and the said service provider having raised the invoices which are complete in themselves and which show the registration number of the service provider as also the amount of Service Tax and payment particulars, the availment of credit by the present appellant on the basis of the said invoices cannot be faulted upon. He submits that if the service provider has not deposited the Service Tax, the Revenue is within their rights and jurisdiction to recover the same from M/s. Keil India Engineering Pvt.Ltd. instead of denying the Cenvat credit of the same to the appellant. Ld.Advocate submits that it is not the case of the Revenue that M/s. Keil India Engineering Pvt.Ltd. is a fake and fictitious firm. For the above proposition he relied upon number of precedent decisions of the Tribunal. He has also drawn our attention to Circular No.441/7/99-CX dated 23.02.1999 laying down that where the Cenvat Credit stands availed by an assessee on the basis of the invoices issued by the suppliers and where the invoices have all the necessary informations and details i.e. description of the goods, assessable value, name and address of the factory or warehouses, the credit of duty so paid has to be allowed.
5. After hearing the ld.AR appearing on behalf of the Revenue and on examination of the sample invoices in question, we note that the 4 E/50902/2014-EX[DB] appellant has admittedly procured the Cenvatable services of construction of factory from M/s. Keil India Engineering Pvt.Ltd. and all the requisite particulars stand mentioned in the said invoices so raised by the service provider. The service provider is also registered with the Service Tax department for their Delhi unit, but their NOIDA unit, who has actually provided the services were not registered. However, registration number stands given in the invoice along with the amount of Service Tax. The appellant is neither expected nor is under any legal obligation to find out that the Service Tax so mentioned in the invoices stands actually paid by the service provider or not.
6. In terms Rule 4(7) of Cenvat Credit Rules readwith Rule 9 of Cenvat Credit Rules, the only requirement of the assessee is to pay the value of the services as also the quantum of service tax as assessed in the invoice raised by the service provider and then to avail the credit. The assessee cannot be held responsible for any default in non-deposit of duty by the service provider and the credit of the service tax paid by him to the service provider for further deposit in the exchequer kitty cannot be denied to him on account of the lapse of the service provider. The Revenue's remedy, in these types of cases lies at the end of service provider, for initiating proceedings against him, in respect of the short levy of service tax.
7. We further note that the said issue of non-payment of tax or duty by the person responsible for payment of such tax or duty and the consequent availment of Cenvat Credit, as reflected in the invoices, has been the subject matter of various decisions. The Hon'ble Supreme 5 E/50902/2014-EX[DB] Court in the case of CCE, Jalandhar vs. Kay Kay Industries reported in 2013 (295) E.L.T. 177 (S.C.) has observed that the assessee cannot verify from the department whether the duty has actually been paid by the manufacturer or not. Similarly, the Hon'ble Jharkhand High Court in the case of CCE, East Singhbhum v. Tata Motors Ltd. reported in 2013 (294) E.LT. 394 (Jhar.) has observed that it is unreasonable to expect buyer of such inputs to go and verify accounts of supplier or to find out from the Central Excise Department whether duty has actually been deposited or not. In such a scenario, the recipient cannot be denied the credit. Similarly, the Hon'ble Rajasthan High Court in the case of J.K.Industries Ltd. v. Union of India reported in 2008 (223) E.L.T. 372(Raj.) observed that as the assessee having fulfilled the requirement which were within his domain he cannot be denied the Modvat credit on account of any fault committed by the seller. The Hon'ble Punjab & Haryana High Court in the case of CCE, Delhi-Gurgaon v. Myron Electricals Pvt.Ltd. [2008 (11) S.T.R. 85 (P & H) has held that the credit cannot be denied on the ground that invoices were issued by the dealer from premises other than for which Central Excise registration was granted.
8. Inasmuch as the appellant has admittedly paid the Service Tax amount to the service provider, along with value of the goods, the fact that the said service provider has not further deposited the same with the government, cannot lead to denial of credit to the present appellant. As such we find no merits in the stand of the Revenue resulting in passing of the present impugned order vide which the credit 6 E/50902/2014-EX[DB] stands denied to them. Accordingly the impugned order is set aside and appeal is allowed with consequential relief to the appellant.
(Pronounced in the open Court on 21.08.2018.)
SD/ SD/
(ANIL G. SHAKKARWAR) (ARCHANA WADHWA)
MEMBER(TECHNICAL) MEMBER (JUDICIAL)
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