2014 (7) TMI 539 - AT - Service Tax

Disallowance of CENVAT Credit - Invocation of extended period of limitation - Held that - This is a case where the benefit of Rule 9(2) of CENVAT Credit Rules, was to be considered. In fact, the appellants had requested for this benefit. However, we find that this request has not at all been considered and ignored and has not been discussed also. In our opinion, the Commissioner should have considered the invoices/documents where the benefit of Rule 9(2) of CENVAT Credit Rules could have been extended and if the appellant was found to be eligible, given the benefit and thereafter denial of credit in respect of other cases should have been made. In the absence of any consideration of the request made by the appellant for the benefit of Rule 9(2), we consider it appropriate that the matter should be remanded at this stage for fresh adjudication after giving reasonable opportunity to the appellants to present their case. - Decided in favour of assessee.

Summary

Issues: Disallowance of CENVAT credit and invocation of extended period.

On the issue of disallowance of CENVAT credit amounting to Rs. 54,18,114, the Tribunal found that invoices were not properly addressed, leading to disallowances under various categories such as invoices not addressed to the corporate office, invoices addressed to different locations, invoices without service recipient's address, and other related documents. The Tribunal noted that the appellant had requested the benefit of Rule 9(2) of CENVAT Credit Rules, which was not considered by the Commissioner. The Tribunal held that the Commissioner should have considered the invoices/documents for the Rule 9(2) benefit and then proceeded to deny credit for other cases if necessary. As the request for Rule 9(2) benefit was not considered, the matter was remanded for fresh adjudication, emphasizing the importance of giving the appellants a reasonable opportunity to present their case.

Regarding the invocation of the extended period for demand, the appellant argued that the extended period should not have been invoked as regular audits were conducted, returns were filed, and the department was aware of the facts. The Tribunal observed that the demand covered the period from November 2007 to July 2011, with only two periods falling within the normal period. The Tribunal agreed with the appellant's contention and found that the extended period should not have been invoked in this case, especially considering the regular audits and compliance with return filings. The Tribunal's decision to remand the matter for fresh adjudication also implied a reassessment of the period involved and the applicability of the extended period for demand.

In conclusion, the Tribunal's judgment focused on the disallowance of CENVAT credit due to improper addressing of invoices and the failure to consider the appellant's request for Rule 9(2) benefit. Additionally, the Tribunal addressed the issue of invoking the extended period for demand, ultimately deciding to remand the matter for a fresh adjudication to ensure a fair consideration of the appellant's case and compliance with the relevant rules and procedures.