Customs, Excise and Service Tax Appellate Tribunal

Hindustan Petroleum Corporation Limited Vs. CCT, Visakhapatnam GST

MANU/CH/0150/2018

14.12.2018

Excise

CENVAT credit can be availed on the basis of debit notes

In instant matter, the Appellant herein is a Public Sector Undertaking engaged in manufacture of various petroleum products and have been availing the benefit of CENVAT credit. They had taken some land on lease from Coromandel International Limited who, in turn, have charged them service tax along with lease rentals through four debit notes. After paying the amount to Coromandel International Limited, Appellant availed CENVAT credit of the service tax paid on these debit notes. A show cause notice was issued seeking to disallow the CENVAT credit availed by the Appellant on the ground that, the subject invoices are debit notes which are not eligible documents for availing CENVAT credit in terms of Rule 9(1) of CENVAT Credit Rules, 2004. After following due process of law, the original authority confirmed the demand along with interest and imposed penalty on the appellant. Aggrieved, Appellant appealed before the first appellate authority who, vide the impugned order, upheld the Order-in-Original and rejected the appeal.

Question involved in present case is whether the credit can be allowed on the strength of four debit notes in question issued by M/s. Coromandel International Limited in favour of the appellant, because (a) debit notes are not specifically included as valid duty paying document under Rule 9(1) of CCR 2004 and (b) whether the debit notes, while printed, do not indicate the amount of service tax paid and this amount has only been written in hand.

It is true that Rule 9(1) of CCR 2004 does not specifically indicate debit notes as one of the documents on the strength of which CENVAT Credit can be availed. However, the Hon'ble High Court of Rajasthan in the case of Bharati Hexacom Limited held that, CENVAT credit can be availed on the basis of debit notes. This is a binding legal precedent, ratio of which applies to the present case.

Copies of debit notes have now been enclosed in the paper book submitted by the Appellant which contains all the relevant details. The service tax amount has been indicated in pen in these four debit notes but that should not be a limitation for availing of CENVAT credit and there is no requirement in the CCR 2004 that all the details of the invoice should be printed on a computer. There is no allegation in the show cause notice that service tax has not been paid by the service provider. CENVAT credit is admissible to the Appellant on the four disputed debit notes. The Impugned order is set aside and the appeal is allowed.

Relevant

Commissioner of Central Excise, Jaipur-I vs. Bharti Hexacom Ltd. MANU/RH/1852/2017

Tags : Demand Penalty Confirmation

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