2012 (10) TMI 259 - AT - Service Tax

Condonation for delay in filling the appeal Disputed order was on demand of service tax is on account of denial of input service credit - Impugned order was issued in May 2009 dispatched through post and might have been received by the appellant in June 2009. They applied for a copy of the order in November 2009 which is well within the extended period of limitation for filing the appeal. But the copy of the order was supplied only in October 2010. Thereafter they filed the appeal within the time also filed an affidavit Held that - Considering the reasons, stated in the application for condonation of delay, are satisfactory to this Bench, we allow the application for Condonation of delay and condone the delay in filing the appeal.

Summary

Issues:
Delay in filing the appeal, denial of input service credit, demand of service tax, applicability of CENVAT credit rules, remand to adjudicating authority for denovo adjudication.

Delay in filing the appeal:
The appellants filed an application for condonation of delay, stating that they did not receive the impugned order until November 2009, within the extended period for filing the appeal. The copy of the order was supplied only in October 2010, after which they filed the appeal. The Tribunal found the reasons satisfactory and allowed the application for condonation of delay.

Denial of input service credit:
The demand of service tax on the appellants was due to the denial of input service credit on invoices from 2004 to September 2007. The appellants, providing taxable and non-taxable services without maintaining separate accounts for exempted services, contended that they availed only a portion of the credit and reversed the rest as per Rule 6(3)(c) of CENVAT Credit Rules. They also referred to legal precedents for services received from outside India and admitted liability for a specific amount.

Demand of service tax:
The demand included services received from outside India before 18.4.2006 and commission received for business promotion services. The Tribunal heard both sides and concluded that a payment of Rs.53,060 would be sufficient in compliance with relevant provisions. The matter was remanded to the adjudicating authority for further verification and denovo adjudication on the available, availed, reversed, and entitled credit.

Applicability of CENVAT credit rules:
The Tribunal noted that the issue was narrow, focusing on verifying the CENVAT credit available, availed, reversed, and entitled. It was emphasized that the demand of Rs.2,41,273 was not sustainable based on legal decisions, and a specific payment was required for compliance. The appellants were directed to cooperate with the adjudicating authority by providing necessary documents for further assessment.

Remand to adjudicating authority for denovo adjudication:
In the interest of justice, the Tribunal remanded the matter to the adjudicating authority for denovo adjudication to verify the CENVAT credit details thoroughly. The appellants were instructed to report compliance by a specified date, and all other issues were kept open for further consideration.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, CHENNAI covers the issues of delay in filing the appeal, denial of input service credit, demand of service tax, applicability of CENVAT credit rules, and the remand to the adjudicating authority for denovo adjudication.