2013 (12) TMI 1176 - AT - Service Tax

Demand of service tax - Availment of CENVAT Credit - Club or Association service - Held that - On a perusal of the show-cause notice, we find there is no indication of the worksheet being annexed to it. On the other hand, the learned Commissioner proceeded on the basis of the worksheet. It is observed that the worksheet had been provided to the appellants and the same is available in the case records. We are not convinced with the argument of the Revenue that the worksheet is available in the case records, which is annexed to the impugned order and, therefore, the demand is justified. In our considered view, it is a fit case, where the appellant deserved to be granted adequate opportunity to place its case before the adjudicating authority after going through the work sheet - Partial demand sustained - Matter remitted back - Decided partly in favour of assessee.

Summary

Issues:
1. Alleged availing of ineligible credit on input services.
2. Confirmation of demand of tax along with interest and penalties.
3. Dispute regarding the availability of worksheet for excess credit availed.

Analysis:
The case involved the appellants providing taxable "Club or Association Service" and facing allegations of availing ineligible credit on input services during a specific period. The learned Commissioner confirmed the demand of tax amounting to Rs.50,84,289/- along with interest and penalties under relevant sections of the CENVAT Credit Rules, 2004 and the Finance Act. The appellant did not dispute the demand of Rs.8,69,567/- on input credit availed for exempted services, which was already paid. However, a significant amount was in dispute concerning tax short-paid due to excess credit utilization and credit availed on wrong documentation. The appellant's counsel highlighted the lack of access to the worksheet used by the Commissioner to determine these amounts, emphasizing the need for transparency in the calculation process.

The authorized representative for the Revenue contended that the worksheet was provided to the appellants, who then filed the appeal based on it. However, upon examination, the Tribunal found no indication of the worksheet being annexed to the show-cause notice. The Tribunal observed discrepancies in the Commissioner's approach, noting that while the worksheet was available in the case records, it was not formally provided to the appellants for their review. Consequently, the Tribunal held that the demand of tax, except for the agreed amount related to exempted services, was not sustainable without the appellants having access to the worksheet to understand the calculations. Therefore, the Tribunal set aside the impugned order, except for the demand of Rs.8,69,567/-, and remitted the matter back to the Commissioner for fresh adjudication after providing the worksheet to the appellants.

In conclusion, the Tribunal allowed the appeal by remanding the case to the Commissioner for a fair and transparent reconsideration. The Commissioner was directed to provide the appellants with the necessary worksheet for a proper understanding of the demand calculations. The appellants were to be given a reasonable opportunity to present their case, and the Commissioner was tasked with deciding on penalties and interest related to the entire demand, including the undisputed amount.