Incorrect Address Details of Service Providers cannot be reason to deny CENVAT Credit when substantiated with Invoice Evidence: CESTAT [Read Order]

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Kolkata Bench, held that incorrect address details of service providers cannot be reason to deny CENVAT Credit when substantiated with invoice evidence.

The appellant, Computer Point Ltd., were alleged to have availed input tax credit based on invoices from companies that had neither submitted ST-3 returns nor paid any service tax during the period 2010-11 to 2012-23. After searching, the non-existence of those firms were confirmed on the said address in the invoices.

A show cause notice dated 12.04.16 was issued proposing recovery of the irregularly availed Cenvat credit along with interest and penalty. The late fee was also confirmed by the Commissioner under Rule 7C of Cenvat Credit Rules, 2004 read with Section 70(1) of the Finance Act, 1994.

The appellant submits that on the basis of the invoices raised, they availed credit and the department has not brought in any evidence to substantiate their allegation that the appellant has not received the service. Notification No. 10/2007 - Central Excise (NT) dated 01.03.2007 was cited, according to which, the person availing Cenvat Credit was not responsible to ensure that service tax paid to the provider of input taxable service has been deposited by such person.

The tribunal observed that the investigation conducted revealed that these invoices were fake but the department failed to bring any evidence to substantiate the allegation that the appellant has not received the service. The bench held that Cenvat credit legally availed in accordance with the provision of Cenvat Credit Rules cannot be denied on account of non-existence of service providers in their addresses.

The two-member bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) held that the disallowance was to be set aside but confirmed the late fee. Accordingly, the appeal was disposed of.

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