Non-Mentioning Of Service Tax Registration In Invoice Is Procedural Lapse, Cenvat Credit Can't Be Denied: CESTAT
Mariya Paliwala
4 July 2024 5:43 AM GMT
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that cenvat credit cannot be denied for the non-mentioning of service tax registration in the invoice.The bench of Ramesh Nair (Judicial Member) and C. L. Mahar (Technical Member) has observed that the entire basis for denial of cenvat credit is wrong and the credit was wrongly denied. The...
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that cenvat credit cannot be denied for the non-mentioning of service tax registration in the invoice.
The bench of Ramesh Nair (Judicial Member) and C. L. Mahar (Technical Member) has observed that the entire basis for denial of cenvat credit is wrong and the credit was wrongly denied. The only discrepancy in the invoice is that the service provider has not mentioned the service tax registration, which is merely a procedural lapse, particularly when there is no case in which the service tax on such an invoice was not paid by the service provider.
The appellant/assessee is primarily involved in providing consulting engineering services. The appellant operated as a sub- or associate consultant for several foreign-based consulting engineering firms, including M/s. Louis Berger, M/s Frischmann Prabhu (India) Pvt Ltd, M/s Dorch Consultant (India) Pvt Ltd, and M/s. Renardet S.A. Ingenieurs.
The prime consultants have discharged their service tax on total consultancy charges, including the consultancy fees paid to the appellant.
The appellant has not paid the service tax on the consulting engineer service provided by them as a subcontractor or associate consultant.
The show cause notice dated October 20, 2008 was issued for the period FY 2005–2006 and FY 2006–2007, proposing a demand of Rs. 30,71,200/- along with interest and an equal penalty under Section 78 of the Finance Act, 1994.
Another show cause notice was issued for the period April 2007 to March 2008, proposing the demand of Rs. 14,34,845/- along with interest and penalty under Section 76 of the Finance Act, 1994.
Both show cause notices have been adjudicated, and the demands proposed under the show cause notice have been confirmed, along with interest and penalties.
The appellant filed appeals before the Commissioner (Appeals), who rejected the appeal.
The assessee contended that the adjudicating authority has wrongly denied the credit by invoking the wrong rule, i.e., Rule 9 (1)(g) of the Cenvat Credit Rules, 2004, read with Rule 4 A (ii) of the Service Tax Rules, 1994. This provision is for the input service distributor, which is not the case. The appellant has received the service directly from the service provider; therefore, invoking the provision of the input service distributor is incorrect, and on that basis alone, the order is incorrect, denying the CENVAT credit. Except for the for the non-mention of the registration number of the service provider, there is no discrepancy in the input service invoice. Therefore, credit cannot be denied.
The tribunal, while allowing the appeal, held that the lower authorities had wrongly denied the cenvat credit, which is liable to be set aside.
Counsel For Appellant: Sanjay Singhal
Counsel For Respondent: P Ganesan
Case Title: Sai Consulting Engineers Pvt Ltd Versus C.C.-Ahmedabad
Case No.: Service Tax Appeal No. 11785 Of 2016
