Customs, Excise and Services Tax Appellate Tribunal

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): P.K. Choudhary (Judicial Member) allowed an appeal holding that Cenvat Credit of Service Tax can be availed on debit notes. The appeal was preferred by the appellant against the Order passed by the First Appellate Authority by which a demand of Cenvat Credit of Rs. 20,89,464/- and Service Tax of Rs. 23,622/- had been confirmed along with interest and imposition of penalty.

During audit of the records of the Appellant, it was contented by the Department that debit notes are not valid documents for availment of Cenvat credit of Service Tax and thus had disallowed the same 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’. Demand of Rs. 23,622/- was made under import of services under Reverse Charge Mechanism, which was paid by the Appellant along with interest of Rs.12,670/- before issuance of the show cause notice on 12-03-2015 and 23-04-2015.

The show-cause notice was issued on 09-10-2015 by the Department for the above issues wherein the demand as proposed in the SCN was confirmed along with interest and penalty. Again, the first Appellate authority also had confirmed the said demand and thus the instant appeal.

Main issue to be answered was as to whether Cenvat credit of Service Tax can be availed on debit notes under the scheme of the Cenvat Credit Rules, 2004.

The Tribunal reproduced Rule 9 of the Cenvat Credit Rules, 2004 and observed that as per clause (f) of the Rules, an invoice issued by a provider of input service is a valid document for availment of Cenvat credit. It was noted that in the present case, the heading of the document as seen from sample copies attached with the appeal paper book though are nomenclated as debit notes, but they contain all the disclosures as required in a tax invoice as per Rule 4A of the Service Tax Rules, 1994.

The Tribunal allowed the appeal holding that Cenvat credit cannot be denied to the Appellants.

[Visa Resources (India) Ltd. v. Commr. of CGST & CX, 2022 SCC OnLine CESTAT 562, decided on 10-08-2022]

Advocates who appeared in this case :

Satyanarayan Gupta, Chartered Accountant for the Appellant (s)

S.S. Chattopadhyay, Authorized Representative for the Respondent (s)

*Suchita Shukla, Editorial Assistant has reported this brief.

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