The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that the Cenvat credit of Service Tax can be availed on debit notes under the scheme of the Cenvat Credit Rules, 2004.The bench of P.K. Chaudhary (Judicial Member) has observed that an invoice issued by a provider of input service is a valid document for availment of Cenvat credit. The...
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that the Cenvat credit of Service Tax can be availed on debit notes under the scheme of the Cenvat Credit Rules, 2004.
The bench of P.K. Chaudhary (Judicial Member) has observed that an invoice issued by a provider of input service is a valid document for availment of Cenvat credit. The heading of the document, as seen from sample copies attached with the appeal paper book, though they are nomenclature as debit notes, contains all the disclosures as required in a tax invoice as per Rule 4A of the Service Tax Rules, 1994.
During the audit of the records of the appellant, it was contended by the Department that debit notes are not valid documents for availment of Cenvat credit for Service Tax. The department had disallowed it to the extent of Rs.20.89,464 availed by the appellant on debit notes issued by Visa Infrastructure Ltd. for "business support" and "management consultancy services". A demand of Rs. 23,622 was made under the import of services under the Reverse Charge Mechanism, which was paid by the appellant along with interest before the issuance of the show cause notice on 12.03.2015 and 23.04.2015.
The Show Cause Notice was issued by the Department, which came to be adjudicated vide order dated 23.01.2017, wherein the demand as proposed in the SCN was confirmed along with interest and penalty. The First Appellate authority also confirmed the demand.
The issue raised was whether cenvat credit of Service Tax can be availed on debit notes under the scheme of the Cenvat Credit Rules, 2004.
The tribunal has observed that the services have not been consumed/utilised by the Appellant and no allegation had been made out in the SCN issued.
"I am of the view that Cenvat credit cannot be denied to the Appellants and thus the appeal succeeds to that extent and the demand is quashed," the CESTAT said.
The CESTAT held that since the amount had been paid with interest before the issuance of the SCN itself, no penalty under section 78 could be imposed.
Case Title: M/s. Visa Resources India Limited Versus Commissioner of CGST & CX
Citation: Service Tax Appeal No.77839 of 2018
Dated: 10.08.2022
Counsel For Appellant: C.A. Satyanarayan Gupta
Counsel For Respondent: Authorized Representative S.S.Chattopadhyay