2019 (4) TMI 1946 - AT - Service Tax

CENVAT Credit - duty paying documents - basic contention of Revenue in support of confirmation of the adjudged demands is that the appellant had contravened the provisions of Rule 9 of the Cenvat Credit Rules 2004 in not maintaining proper register/records prescribed under the statute - HELD THAT - It is found that contradictory stand have been taken by both sides in respect of the submission of the relevant records/register showing availment of Cenvat credit on the invoices issued by the service providers. Since availment of Cenvat credit based on the invoice and maintenance of proper records are purely a question of fact which can very well be appreciated at the original stage the matter should be remanded to the original authority for proper verification of the records maintained by the appellant showing the particulars of availment of Cenvat credit on the disputed invoices. The appeal is allowed by way of remand to the original authority for verification of the records regarding availment of the disputed Cenvat credit on the basis of the invoices issued by the service providers. Since the amount involved in this appeal is quite substantial it is expected that the appellant should properly co-operate in the proceedings by submitting all the required documents for verification by the original authority.

Summary

Issues:
1. Alleged contravention of Rule 9 of the Cenvat Credit Rules, 2004 in maintaining proper register/records.
2. Disallowance of Cenvat credit by the department.
3. Appeal against the impugned order disallowing Cenvat credit and imposing penalties.

Analysis:

Issue 1: Alleged contravention of Rule 9 of the Cenvat Credit Rules, 2004
The Revenue contended that the appellant had contravened Rule 9 by not maintaining proper register/records as prescribed. The appellant argued that it had submitted the Cenvat register/records in CD form and supporting invoices before adjudication. The Tribunal noted the contradictory stands and emphasized that the maintenance of proper records and availing Cenvat credit are factual matters. The Tribunal decided to remand the matter to the original authority for proper verification of records to determine the particulars of Cenvat credit availed based on disputed invoices.

Issue 2: Disallowance of Cenvat credit
The Service Tax Department disallowed Cenvat credit availed by the appellant during 2009-10 to 2011-12 due to alleged improper maintenance of Cenvat register. The impugned order disallowed a substantial amount of credit along with interest and imposed penalties under Sections 77 and 78 of the Finance Act, 1994. The Tribunal found the need for proper verification of records and set aside the impugned order, allowing the appeal by way of remand to the original authority for verification of the disputed Cenvat credit based on service providers' invoices.

Issue 3: Appeal against the impugned order
The appellant was aggrieved by the impugned order disallowing Cenvat credit and imposing penalties. The Tribunal, after hearing both sides and perusing the records, decided to remand the matter for verification of records. The Tribunal highlighted the importance of cooperation from the appellant in submitting all necessary documents for verification by the original authority. The appeal was allowed by way of remand, indicating the expectation of cooperation from the appellant due to the substantial amount involved in the case.

In conclusion, the Tribunal's judgment in the appeal involved remanding the matter to the original authority for verification of records regarding the disputed Cenvat credit. The decision highlighted the significance of maintaining proper records and cooperation from the appellant during the verification process to resolve the issues raised by the Service Tax Department effectively.