ELECTROTHERM (INDIA) LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE facts of the case in brief are that the appellant availed services of job worker by name of M/s. Haritha Fab for fabricating certain machinery within their factory, during the period from October, 2004 to February, 2005. Taking a view that the job worker had provided business auxiliary services to the appellant, an offence case was registered against him and service tax was demanded. Before the adjudication proceedings were over, the job worker deposited the service tax and raised the invoices on the appellant on 10 -10 -2006. However, the job worker did not take registration as a service provider. On the basis of invoices issued by the job worker, the appellants availed Cenvat credit of Rs. 7,40,076/ - on 31 -10 -2006. On the ground that the invoice issued by the job worker was not proper document as per Rules and appellant was not eligible for Cenvat credit, proceedings were initiated which culminated into confirmation of demand for wrongly availed Cenvat credit of Rs. 7,40,076/ - with interest. Further, penalty equal to Cenvat credit amount availed by the appellant has also been imposed under Rule 15 of Cenvat Credit Rules, 2004. Heard both sides.

(2.) THE show cause notice was issued on the ground that appellant availed Cenvat credit in spite of the fact that invoice issued by the job worker (M/s. Haritha Fab) was not in conformity with the provisions of Rule 9 of Cenvat Credit Rules, 2004 and Rule 4A of Service Tax Rules, 1994. Further, the show cause notice also stated that Rule 9(2) of Cenvat Credit Rules, 2004 restricts the availment of credit in such cases. Since the invoices issued did not contain required information as envisaged in Rule 4A of Service Tax Rules, 1994, credit was not admissible. Before I proceed further, it would be appropriate to reproduce the relevant rules as existed during the relevant time when the credit was taken: -

(3.) AFTER hearing the submissions made by both the sides and going through the records, I find that the stand taken by the Revenue is that the invoices did not contain the details as required under Rule 4A of Service Tax Rules, 1994. This cannot be found fault with. However, when it comes to availment of Cenvat credit, both the lower authorities have considered the amended Rule 9(2) of Central Excise Rules, which provides that, if the document does not contain all the particulars but contains details of service tax payable, description of taxable service, assessable value, registration number of the service provider, name and address of the service provider, Assistant Commissioner/Dy. Commissioner can condone the omission in the invoice and allow the Cenvat credit to be availed. However, prior to 1 -3 -2007, the Assistant Commissioner/Dy. Commissioner was required to allow Cenvat credit if he was satisfied that the service tax was paid and service was actually used. It has to be noted that the Rule require that Assistant Commissioner/Dy. Commissioner shall record the reasons for not denying the credit in each case.