Debit Notes are Valid Documents for Availing Credit: CESTAT allows Refund to Ford [Read Order]

While allowing relief to Ford Business Services Centre, the Chennai bench of the CESTAT held that the debit notes are valid documents for availing credit.

Assessee engaged in providing export of services, filed refund claims under Rule 5 of the Cenvat Credit Rules, 2004 for the unutilized cenvat credit.  The claim for the refund so made had been partly allowed by the refund sanctioning authority. However, claim in respect of credit availed on Event Management Services, Renting of Immovable Property services for car parking and credit availed on debit notes were rejected.

Before the Tribunal, the counsel for the assessee, Shri Rabeen Jayaram submitted that the period involved in these appeals is prior to 1.4.2011 when the definition of input services had a wide ambit as it included the words activities relating to business.  The Event Management service was availed for the promotion of sales of the assessee.  Renting of Immovable property service was availed for the purpose of car parking of the employees and management of the company.

With regard to the claim of credit availed on Event Management Services, the CESTAT ruled that since they were availed for sales promotion, it is allowable. So also, the car parking was availed for the purpose of giving parking facilities to the employees as well as the management, therefore, the refund cannot be rejected, the bench said.

The Tribunal further noticed the decision of Ultra Tech Cement Ltd. Vs CCE wherein it was held has held that prior to 1.4.2011 since the services availed in the course of business of the assessee, the credit is admissible.

Regarding the issue of credit availed on the debit notes, the Tribunal relied on the decision in Ad-Magnum Packaging Pvt. Ltd. in which the Tribunal held that debit notes are valid documents for availing credit provided it contains all requisite information as prescribed in Rule 9 (1) of Cenvat Credit Rules, 2004.

Following the said decision, the Tribunal held that debit notes are valid documents for availing credit and rejection of refund on this ground is unjustified. However, since Commissioner (Appeals) has observed that the said debit notes do not contain the necessary information, we are of the considered opinion that the issue with regard to credit availed on debit notes requires verification.