Incorrect Address Mentioned In Invoices Can't Be A Reason To Deny Cenvat Credit: CESTAT

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that an incorrect address mentioned in invoices cannot be a reason to deny CENVAT credit.

The bench of Rachna Gupta (Judicial Member) has observed that the invoices with incorrect addresses issued by the input service providers contain all the requisite particulars as required under the proviso to Rule 9(2); therefore, Cenvat credit cannot be denied to the appellant. In fact, Rule 9(2) nowhere requires mentioning the address of the service recipient. The proviso to Rule 9(2) of the Credit Rules kicks in only when the conditions under Rule 4A of the Service Tax Rules, 1944, read with Rule 9 of the Credit Rules, are not fulfilled entirely.

The appellant/assessee is in the business of manufacturing bearings, bearing components, and machines and was also holding service tax registration for providing the services as business auxiliary services, consulting engineering services, etc. During the course of audit and verification of Cenvat records of input services maintained by the appellant, it was observed that they had wrongly availed Cenvat credit for input services on the basis of invoices that were not prescribed documents as per Rules 4(7) and 9 of the Cenvat Credit Rule, 2004.

It appeared to the department that discrepancies had come to light during the audit; otherwise, the facts might not have come to the knowledge of the department. Thus, the appellant is alleged to have suppressed the facts from the department with the intent to evade payment of central excise duty. Therefore, the wrongly taken Cenvat credit of Rs. 12,62,017 on input services was proposed to be recovered with proportionate interest and appropriate penalties. The proposal has been confirmed. The appeal against the order was dismissed.

The assessee contended that the invoices issued by the service providers contain all the details specified under Rule 9(1)(f) of the Credit Rules, read with Rule 4A(1) of the Service Tax Rules. The only objection raised in the show cause notice and endorsed by both the lower authorities below is that the invoices do not contain the correct address of the appellant, and thus, these invoices fail to satisfy the requirement of Rule 4A(1) of the Service Tax Rules.

The tribunal, while allowing the appeal, held that in the absence of any evidence from the department that the units mentioned in the invoices are the service recipients, that those units have accounted for those invoices in their accounts, or that any other unit than the appellant's name in the invoices based on which the appellant has availed of Cenvat credit is nothing but a procedural lapse, substantial benefit cannot be denied.

Counsel For Appellant: Dhruv Tiwari

Counsel For Respondent: Rohit Issar

Case Title: M/s. National Engineering Industries Limited Versus Commissioner of CGST & Central Excise, Jaipur

Case No.: Excise Appeal No. 55041 of 2023 [SM]

Click Here To Read The Order