2013 (12) TMI 44 - AT - Service Tax

Availment of CENVAT Credit - Banking and other Financial services - payment of service tax under wrong accounting head - Held that - joint effort should be made for verification of the input invoices lying in their head office and at various places on a sample basis or on the basis that could be devised and made simplifier for verification. Regarding the other issues, the appellant had already deposited accepting their liability on renting of the immoveable property, which could be verified by the adjudicating authority. Regarding the demand of Rs.1,79,39,279/-, and the interest amount of Rs.4,63,116/- against a wrong accounting code/head - assessee could not be asked to pay the amount again if it is paid against wrong accounting head/code. Also, we find from the letter dated 6/8/2013 placed by the Ld. C.A. that for the subsequent period, the Department has regularized such wrong payment. In the result, the case needs to be remitted to the adjudicating authority for re-verification of the documents relating to the demand - Decided in favour of assessee.

Summary

Issues:
1. Waiver of pre-deposit of total demand of Service Tax, penalty, and interest.
2. Availment of Cenvat Credit on input services.
3. Discharge of service tax on renting of immovable property.
4. Liability towards Education Cess and Secondary and Higher Secondary Cess under wrong accounting code.

Analysis:
1. The appellant, a public sector bank, sought waiver of pre-deposit of a total demand of Service Tax, penalty, and interest amounting to Rs. 14.57 crores. The demand comprised three parts: availing Cenvat Credit on input services, payment for renting immovable property, and liability towards Education Cess under the wrong accounting code. The appellant claimed possession of all relevant documents and readiness to produce them for verification by the Department.

2. The issue primarily revolved around the denial of Cenvat Credit amounting to Rs. 12.66 crores due to the appellant's failure to produce relevant input service invoices for verification by the Department. The appellant contended that they were prepared to provide all necessary documents but faced challenges due to the volume of paperwork. The Tribunal acknowledged the need for joint efforts to devise a methodology for verification, emphasizing the importance of resolving the impasse regarding the verification of input invoices.

3. Regarding the payment for renting immovable property and the demand for Education Cess under the wrong accounting code, the Tribunal referred to a previous judgment indicating that the appellant should not be required to repay the amount if paid under the wrong accounting head. The Department had regularized such wrong payments for subsequent periods, supporting the appellant's position.

4. After considering arguments from both sides, the Tribunal decided to remit the case to the adjudicating authority for re-verification of documents related to the Cenvat Credit demand, regularization of the Education Cess liability, examination of the payment for renting immovable property, and further scrutiny as necessary. The impugned order was set aside, and the appeal was allowed by way of remand for detailed re-examination and resolution of the issues.