CESTAT Kolkata Grants ₹1.45 Crore CENVAT Credit Relief To PwC's Kolkata Service Delivery Arm Despite Invoice Irregularities

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has observed in a case that CENVAT credit/refund could not have been denied where receipt of services and payment of service tax were undisputed. 

The bench consists of Judicial Member Ashok Jindal and Technical Member K. Anpazhakan, decided a batch of service tax appeals filed by Price Waterhouse Coopers Service Delivery Centre (Kolkata) Pvt. Ltd., challenging the denial of CENVAT credit and refund on multiple grounds mostl technocal irregularities. 

The appellant, engaged in providing export-oriented services, had availed of CENVAT credit on various input services.

The department issued show cause notices proposing denial of credit and refund, alleging several irregularities, including non-submission of original invoices, invoices not being issued in the appellant's name, discrepancies in address details, availment of credit beyond the prescribed period, incorrect refund computation, and ineligibility of certain input services such as consultancy, convention, banking, financial services, debit notes and car parking carges.

Upon examination, the Tribunal noted that although only Xerox copies of invoices were submitted during adjudication, the existence of original invoices was never disputed.

The bench held that "the cenvat credit cannot be denied based on the allegation that the original copies of the invoices were not submitted. Therefore, the cenvat credit amounting to Rs.32,50,111/- is allowed."

On the objection that some invoices were not issued strictly in the appellant's name, the Tribunal observed that the invoices contained the appellant's name and address, though in certain cases names of other persons also appeared, and that payments had been duly made for the services rendered. The bench held that the cenvat credit cannot be denied on these allegations. Accordingly, the tribunal allowed CENVAT credit of Rs.76,25,814 on this count

As regards minor discrepancies in the address mentioned on the invoices, the Tribunal held that such clerical errors could not form the basis for denial when receipt of services and payment of service tax were undisputed, and accordingly allowed credit of ₹23.35 lakh.

On the issue of availment of credit beyond six months from the date of invoice, the Tribunal held that for the period prior to 1 March 2015, there was no statutory time limit for availing CENVAT credit. Since the credit in question pertained to the period prior to the amendment extending the time limit, the availment was held to be valid and credit of ₹3.22 lakh was allowed.

With respect to refund computation, the Tribunal found that "the appellant has provided the calculation of refund claim computation on the basis of export turnover and total turnover and as per the same 99.4% on which, the appellant has entitled to claim the refund and as per the same, they are entitled to avail the cenvat credit amounting to Rs.4,03,27,524/- whereas they have availed cenvat credit amounting to Rs.3,96,71,423/-. Therefore, there is a miscalculation. On the basis of that, the refund claim cannot be denied."

Accordingly, refund of Rs. 2,37,417 was allowed on this issue.

The bench noted that the credit availed on consultancy services with respect to leadership programme and training programme for induction of new employees is for business purposes only. Therefore, the appellant is entitled to take the cenvat credit on the said services, which are input service of the appellant.

The Tribunal held that "service of banking has been availed by the appellant for export of service, which are input service of the appellant and these services cannot be exported. Therefore, the appellant is entitled to take the cenvat credit of Rs.1,12,413/-."

The Bench also upheld availment of CENVAT credit on the basis of debit notes, holding that the documents contained all particulars required under Rule 9 of the CENVAT Credit Rules, 2004. On this ground, credit of Rs. 93,800 was allowed.

In respect of car parking charges, the bench found that "the car parking charge has been paid by the appellant for parking of cars for their employees or visitors for their business purposes. Therefore, the appellant is entitled the cenvat credit on the same."

The Tribunal recorded that the appellant did not press CENVAT credit amounting to Rs 1,80,158, and the same was accordingly denied. Ultimately, it  held that the appellant is entitled to take the CENVAT credit/refund of the amount of Rs. 1.45 crore.

For Appellant: Chartered Accountant, Snehal Agarwal

For Respondent: Authorized Representative, P. Das