2014 (3) TMI 407 - AT - Service Tax

Demand of service tax - Penalties under sections 76, 77 and 78 - Availment of CENVAT credit - Held that - CENVAT credit taken based upon the invoices which are not in the name of the applicant is not disputed. The Show Cause Notice was issued in April 2009 and through medium of the Show Cause Notice the applicant was made aware of the discrepancy. In the last four years they could not bring the corrected invoices. In view of this the applicant has not made out a case for waiver of pre-deposit of the disputed amount - Conditional stay granted.

Summary

Issues: Availment of CENVAT credit based on invoices not in the applicant's name; Discrepancy in duty paying documents; Eligibility for waiver of pre-deposit of disputed amount and penalties.

Analysis:
1. Availment of CENVAT Credit: The applicant availed CENVAT credit based on invoices issued by M/s Zee Turner Ltd, which were in the name of M/s Hemraj Cable Network, not in the applicant's name. The department contended that duty paying documents not in the applicant's name are ineligible for credit. The applicant argued that they received the service, paid for it, and the discrepancy in the invoice name was a mistake by the service provider. Despite efforts to resolve the issue with the service provider and distributor, the matter remained unresolved. The applicant also presented a certificate stating the non-existence of a company named M/s Hemraj Cable Network in the area.

2. Waiver of Pre-Deposit: The appellate authority upheld the department's findings, emphasizing the lack of corrected invoices in the past four years. The applicant failed to rectify the discrepancy despite being notified through a Show Cause Notice in April 2009. As a result, the applicant was directed to deposit the remaining 50% of the disputed amount within four weeks. However, upon depositing the amount, there would be a waiver of pre-deposit of penalties until the appeal's disposal. The applicant's counsel acknowledged the order, serving as sufficient intimation to the applicant.

3. Compliance and Reporting: The judgment concluded with a directive for compliance to be reported by a specified date, indicating the procedural aspect to be followed post the decision. The detailed analysis encompassed the core issues of CENVAT credit availment, discrepancy in invoices, eligibility for waiver of pre-deposit, and the procedural steps to be taken following the judgment. The decision highlighted the importance of correct documentation and compliance with tax regulations, underscoring the significance of rectifying discrepancies promptly to avoid penalties and ensure smooth appeal proceedings.