2015 (12) TMI 1162 - AT - Service Tax

CENVAT Credit - Duty paying documents not produced - Reverse Charge Mechanism - Held that - Adjudicating authority in the impugned order specifically held that these demands were neither disputed by the appellant in the written submission nor during the personal hearing. The adjudicating authority further held that the credit has been availed and utilized without any document evidence for the payment of service tax and without specifying the input service - in the show cause notice there is a specific allegation that appellant has availed this credit without any documents evidencing the payment of service tax and without specifying input services and the input service provider as mandatory under the Cenvat Credit Rules. In spite of this specific allegation in reply to show cause notice appellant had not contested this averment in the reply to show cause notice nor in the written submission filed at the time of personal hearing. In the appeal before us the appellant in the grounds of appeal has challenged this demand but had not produced any evidence as mentioned in the show cause notice regarding the payment of service tax. In these circumstances, we find no infirmity in the impugned orders where these demands are confirmed - Decided against the assessee.

Summary

Issues:
1. Confirmation of demand on reverse charge mechanism for taxable services received from a foreign service provider.
2. Denial of credit of service tax availed by the appellant leading to confirmed demands and penalties.

Analysis:

Issue 1: Confirmation of demand on reverse charge mechanism for taxable services received from a foreign service provider:
The appellant contested the demand based on reverse charge mechanism citing a decision of the Hon'ble Bombay High Court and the subsequent dismissal of an appeal by the Hon'ble Supreme Court. The appellant argued that as per the High Court decision, recipients were not liable to pay service tax for services received from abroad before 18.4.2006. The Tribunal found the demands unsustainable based on the settled legal position post the mentioned court decisions. Consequently, the demands and penalties related to service tax on the basis of reverse charge mechanism were set aside.

Issue 2: Denial of credit of service tax availed by the appellant leading to confirmed demands and penalties:
Regarding demands confirmed after denying credit of service tax availed by the appellant, the adjudicating authority noted that the appellant did not dispute these demands during the proceedings. The appellant argued that they had responded to audit queries with documentary proof of payment of service tax, which the authority allegedly did not consider. The Tribunal observed that the appellant failed to contest the specific allegations in the show cause notice related to availing credit without proper documentation. Despite the appellant's challenge in the appeal, the lack of evidence supporting the payment of service tax led to the confirmation of these demands. Therefore, the Tribunal found no fault in the impugned orders confirming these demands.

In conclusion, the Tribunal ruled in favor of the appellant on the issue of demands based on reverse charge mechanism but upheld the confirmed demands related to denial of credit of service tax availed due to insufficient evidence provided by the appellant. The appeals were disposed of accordingly, considering the specific arguments and legal precedents cited during the proceedings.