2015 (8) TMI 800 - AT - Service Tax

Wrongful availment of CENVAT Credit - Excess balance of service tax - Held that - Appellant has claimed Cenvat credit of ₹ 17,66,710/- on debit notes. Further, the amount was not included in the closing balance in ST-3 returns for the month September, 2008 due to clerical error. On perusal of the debit notes it is seen that some of these debit notes do not bear the service tax registration number. Learned Counsel for the appellant asserted that service tax as per these debit notes have been paid and that they are able to establish the same. In such circumstances I am of the view that the matter has to be remanded to the adjudicating authority to verify these debit notes. - Decided in favour of assessee.

Summary

Issues: Disallowance of Cenvat credit as Input Service Distributor.

In this case, the appellants were aggrieved by the disallowance of Cenvat credit as Input Service Distributor. The allegation against the appellants was that they had taken an excess opening balance for service tax and education cess, thus wrongly availing credit. The appellants argued that the closing balance shown in the ST-3 return was erroneous and corrected in the opening balance for the subsequent month. They presented a C.A. Certificate to support their claim, showing the correct credit amount available. Additionally, they relied on previous judgments to argue that errors in ST-3 returns are procedural omissions and credit should be allowed based on debit notes issued by their C&F agents.

The learned Counsel for the appellants cited judgments in support of their argument, emphasizing that credit should be allowed based on debit notes. On the other hand, the ld. DR reiterated the findings in the impugned order, stating that revised ST-3 returns should have been filed if mistakes were made. The ld. DR also pointed out that some debit notes lacked crucial information, such as the service tax registration number, to verify if the service tax had been paid.

After hearing both sides and examining the records, the tribunal found that the appellants had claimed Cenvat credit based on debit notes, some of which did not contain the service tax registration number. The tribunal decided to remand the matter to the Original Adjudicating Authority for further verification of the debit notes. The adjudicating authority was instructed to examine the debit notes and consider the judgments cited by the appellants. Consequently, the appeal was allowed by way of remand for denovo adjudication.