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CX – Invoices showing wrong address, if subsequently corrected, are to be treated as eligible documents for availment of credit: CESTAT

2019-TIOL-2478-CESTAT-MUM

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH, MUMBAI

Excise Appeal No. 85937 of 2018

Arising out of Order-in-Appeal No. NGP-EXCUS-000-APPL-573-17-18, Dated: 07.12.2017
Passed by the Commissioner of CGST & Central Excise & Service Tax (Appeals), Nagpur

Date of Hearing: 15.03.2019
Date of Decision: 16.07.2019

M/s JSW STEEL COATED PRODUCTS LTD
A-10/1 MIDC INDUSTRIAL AREA KALMESHWAR, NAGPUR – 441501

Vs

COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX
NAGPUR, P O BOX 81, TELANGKHEDI ROAD
CIVIL LINES, NAGPUR – 440001

Appellant Rep by: Shri B B Mohite, Adv.
Respondent Rep by: Shri N N Prabhudesai, Supdt. AR

CORAM: Suvendu Kumar Pati, Member (J)

CX- Appellant is engaged in manufacturing of CR coils/sheets, color coated/galvanized sheets – SCN dated 10.12.2015 issued to appellant proposing recovery of wrongly availed CENVAT credit during the period April, 2014 to March, 2015 on the grounds that address of the appellant mentioned in the input invoices was not that of factory of manufacturing to qualify as valid duty paying documents and that payment of value of service and ST was paid by the CHA sub-contractor and not by CHA itself – entire demand of Rs.17.05 lakhs confirmed – on appeal, the Commissioner (Appeals) reduced the duty demand to Rs.12.33 lakhs – appeal to CESTAT.

Held: In view of Tribunal decision in the case of Om Textiles – 2006-TIOL-1524-CESTAT-MUM invoices showing wrong address, if subsequently corrected, are to be treated as eligible documents for availment of credit – further, if duty is paid by the sub-agency who carried out the work and passed on through the intermediary, credit of ST paid in such process is admissible credit – the appeal is allowed by setting aside the impugned order: CESTAT [para 5, 6]

Appeal allowed

Case laws cited:

CCEX & Service Tax, Raipur Vs. Dayalalmeghi and Company 2015 (38) STR 557 (Tri.-Delhi)… Para 3

Bhalla Techtran Industries Ltd. Vs. CCE, Noida 2016 (342) ELT 448 (Tri.-Del.) … Para 3

Om Textiles vs. CCE, New Delhi – 2006-TIOL-1524-CESTAT-MUM … Para 3

CCE, Salem Vs. Chemplast Sanmar Ltd 2007 (5) STR 18 (Tri.-Chennai)… Para 3

Parekh Plast (India) Pvt. Ltd. Vs. CCE,2012 (25) STR 46 (Tri.-Ahmd.)… Para 3

CCE. Kolkata-VI Vs. ITC Ltd – 2013-TIOL-1135-CESTAT-KOL… Para 3

Macleods Pharmaceuticals Ltd. Vs. CCE, Vapi – 2012-TIOL-331-CESTAT-AHM… Para 3

CCE, Jalandhar Vs. Royal Enterprises – 2006-TIOL-212-SC-CX … Para 3

FINAL ORDER NO. A/86248/2019

Per: Suvendu Kumar Pati:

Order for recovery of CENVAT credit of Rs 17,05,140/- as inadmissible credit availed by the appellant that was reduced to Rs 12,33,291/- by Commissioner of CGST & Central Excise & Service Tax (Appeals), Nagpur along with interest and penalties is assailed by the appellant in this forum.

2. Factual backdrop of the case, in a nutshell, is that appellant is engaged in manufacturing of C.R. Coils/Sheets Color Coated/Galvanized Sheets. Basing on audit objection, show-cause notice dated 10.12.2015 was issued to appellant it proposing recovery of wrongly availed CENVAT credit during the period April, 2014 to March, 2015 along with interest and penalty as per Central Excise Act, 1944 read with CENVAT Credit Rules, 2004 on the grounds that address of the appellant mentioned in the input invoices was not that of factory of manufacturing to qualify as valid duty paying documents and that payment of value of service and Service Tax was paid by the CHA sub-contractor and not by CHA itself. The matter was adjudicated upon and entire duty demand of Rs 17,05,140/- along with interest and equivalent penalty was confirmed by the Adjudicating Authority against which appellant got partial relief of reduced duty demand of Rs 12,33,291/- plus interest and equivalent penalty by preferring appeal before the Commissioner (Appeals). The legality of the reduced duty demand is the subject matter of this appeal.

3. In the memo of appeal and during course of hearing of the appeal, learned Counsel for the appellant Shri B.B. Mohite submitted that the grounds of rejection by the Commissioner (Appeals) of CENVAT credit on tax paid through invoices of M/s Sapphire Technologies Ltd., Mumbai for Rs 11,01,677/- was that wrong address was mentioned in the said invoices, as Head Office staff of the appellant dealing with imports were working from that office but invoices clearly indicated the appellant’s company name and the factory location “Kalmeshwar” which can be verified from Annexure- F1 of the appeal memo. While conceding that the invoices were inadvertently cancelled, he submitted that a certificate in writing was issued by the service provider M/s Sapphire Technologies Ltd., Mumbai that those invoices were valid invoices and address was accordingly corrected in all 18 invoices with signature and seal of the Director of M/s Sapphire Technologies Ltd., Mumbai himself, for which the Commissioner (Appeals)’s finding that such corrections were not made by the authorised signatory who issued the invoices is of no significance since the higher authorities i.e. Director himself had endorsed the corrections with seal of the service provider company. He further brought the attention of this Bench to form 18 filed under Section 146 of Company Act, 1956 to justify change of address of the service provider to JSW Centre, Bandra Kurla Complex, Mumbai from its earlier address Jindal Mansion, Mumbai – 400 026 to remove the doubt raised by the Commissioner (Appeals) that such certificate was issued form a different address and was, therefore, not a valid certificate. He placed his reliance on the decision reported in 2015 (38) STR 557 (Tri.-Delhi) in the case of CCEX & Service Tax, Raipur Vs. Dayalalmeghi and Company, 2016 (342) ELT 448 (Tri.-Del.) in the case of Bhalla Techtran Industries Ltd. Vs. CCE, Noida, 2006 (199) ELT 47 (Tri.-Del.) in the case of Om Textiles vs. CCE, New Delhi = 2006-TIOL-1524-CESTAT-MUM 2007 (5) STR 18 (Tri.-Chennai) in the case of CCE, Salem Vs. Chemplast Sanmar Ltd. , 2012 (25) STR 46 (Tri.-Ahmd.) in the case of Parekh Plast (India) Pvt. Ltd. Vs. CCE, Vapi to justify that discrepancies in the duty paying documents cannot be the basis for disallowing the credits, particularly when such discrepancies are removed by subsequent corrections in the duty paying documents. In respect of invoices raised by service provider M/s Seaways Shipping and Logistic Ltd. involving CENVAT credit of Rs 1,31,614/- that was disallowed on the ground that tax was not paid by M/s Seaways Shipping and Logistic Ltd., learned Counsel for the appellant in referring to this Tribunal’s decision reported in 2013 (30) STR 699 (Tri.-Del.) submitted that after making payment of value of service and Service Tax to the sub-contractor, CHA M/s Seaways had raised the invoices to the appellant and CHA being an intermediary, the benefit of credit of Service Tax paid by the sub-agency should not be denied to the appellant. He also put forth submissions on non-applicability of period of limitation and penalty with reference to the decisions reported in 2013 (291) ELT 377 (Tri.-Kolkata) in the case of CCE. Kolkata-VI Vs. ITC Ltd = 2013-TIOL-1135-CESTAT-KOL., 2013 (296) ELT 379 (Tri.-Ahd.) in the case of Macleods Pharmaceuticals Ltd. Vs. CCE, Vapi = 2012-TIOL-331-CESTAT-AHM, 2016 (337) ELT 482 (SC) in the case of CCE, Jalandhar Vs. Royal Enterprises = 2006-TIOL-212-SC-CX and prayed to set aside the order of the Commissioner (Appeals) to the extent he holds those credits as inadmissible.

4. In response to such submissions, learned Authorised Representative for the respondent-department Shri N.N. Prabhudesai, superintendent supported the reasoning and rationality of the order passed by the Commissioner (Appeals) with reference to his findings at para 32 and stated that the appellant had not submitted the necessary documents before the lower authorities to substantiate its claim, for which the order passed by the Commissioner (Appeals) needs no interference by the Tribunal.

5. Heard from both sides and perused the case record. It is observed that in para 35 of the Order-in-Appeal, learned Commissioner (Appeals) had allowed the part of claim only on the ground that there was no allegation that the said input services had not been received and used by the appellant for manufacture of its dutiable final products, since appropriate Service Tax on those input services have been paid. This being the parameter to accept admissibility of CENVAT credit, rejection of CENVAT credit in respect of the invoices of M/s Sapphire Technologies Ltd. on grounds that it is not addressed to the factory, corrections were not made by the same person or address of the service provider in the invoices and in its subsequent certificate issue is different are too technical, since in the reply to the audit report as seen in Annexure-B of the appeal memo at page no. 46 & 47 clearly indicates that appellant had submitted copies of invoices incorporating the correct factory address and copy of certificate dated 17.10.2015 in the form of enclosures to the reply to show-cause notice. Be that as it may, in view of the decision of this Tribunal reported in 2006 (199) ELT 47 (Tri.-Del.) in the case of Om Textiles vs. CCE, New Delhi = 2006-TIOL-1524-CESTAT-MUM 2007 (5) STR 18 (Tri.- Chennai) in the case of CCE, Salem Vs. Chemplast Sanmar Ltd., invoices showing wrong address, if subsequently corrected, are eligible documents for availment of credit which precedent is followed till date as found from the decision reported in 2016 (342) ELT 448 (Tri.-Del.) in the case of Bhalla Techtran Industries Ltd. Vs. CCE, Noidacredits on the basis of those decisions can’t be held to be inadmissible. Further, in view of decisions of this Tribunal cited [2013 (30) STR 699 (Tri.-Del.)] (supra) if duty is paid by the subagency who carried out the work and passed on through the intermediary, credit on Service Tax paid in such process is inadmissible credit. Hence the order.

ORDER

6. The appeal is allowed and the order passed by the Commissioner of CGST & Central Excise & Service Tax (Appeals), Nagpur denying CENVAT credit of Rs 12,33,291/- vide Order-in-Appeal No. NGP-EXCUS-000-APPL-573-17-18 dated 07.12.2017 is hereby set aside.

(Order pronounced in the open court on 16.07.2019)

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