2016 (2) TMI 1012 - AT - Service Tax

CENVAT credit - the opening balance of credit availed is shown excess as compared to their account in the return - Held that - I find that there is no allegation against the appellant that they have wrongly availed credit in their Cenvat credit account. Only document to check whether the appellant has availed the credit wrongly or not is the Cenvat credit account and not ST-3 return although the appellant has shown the excess opening balance in ST-3 return which could have been verified through Cenvat credit account - the credit cannot be denied without corroborative evidence that the appellant has availed credit wrongly - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appeal against demand of excess credit amount in ST-3 returns.

Analysis:
The appellant, engaged in business auxiliary service, appealed against a demand of &8377; 2,01,937/- confirmed in the impugned order for showing excess credit amount in their ST-3 returns. The appellant's opening balance of credit availed was higher than the account in the returns for specific periods. The allegation was that the appellant had shown excess credit in the opening balance of the returns, leading to the demand confirmation along with interest and penalty. The appellant contended that there was no dispute regarding the availability of credit, correctly entered in their account, and the issue was related to incorrect filing of returns, not wrongful availment of credit.

The appellant argued that since there was no dispute about the availability of credit, the excess credit shown in the returns should not lead to denial of credit. The AR, on the other hand, reiterated the findings of the impugned order. Upon careful consideration, the Tribunal found that there was no allegation of wrongful availment of credit in the Cenvat credit account by the appellant. The Tribunal emphasized that the Cenvat credit account, not the ST-3 return, was the document to verify the correct availment of credit. The excess opening balance in the ST-3 return could have been cross-checked with the Cenvat credit account. As there was no specific allegation in the show cause notice that the appellant had not filed ST-3 returns, the credit could not be denied without corroborative evidence of wrongful availment.

Therefore, the Tribunal set aside the impugned order, allowing the appeal with consequential relief, if any. The judgment highlighted the importance of verifying credit availment through the appropriate document, in this case, the Cenvat credit account, and emphasized the need for specific allegations and corroborative evidence before denying credit to the appellant.