2016 (7) TMI 491 - AT - Central Excise

Extended period of limitation invoked - Disallowance of credit on service tax paid on input services for the period February, 2008 to June 2009 - main contention raised by appellant/Revenue is that the Commissioner(Appeals) has no powers to accept or consider additional evidence and delete the disallowance - Held that - The evidence produced by the respondents before the Commissioner(Appeals) is nothing but originals of the invoices/bills of which photocopies were already produced before original authority. The Revenue has no case that there was discrepancy in the photocopies or originals produced. So also there is no dispute that service tax was paid and accounted for as per the invoices. Rule 5 of the Central Excise Rules 2001 referred by appellant/Revenue deals with production of additional evidence before Commissioner(Appeals). Sub-clause (4) of the said rule states that nothing contained in this rule shall affect the power of Commissioner(Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal . Needless to say, this rule gives necessary powers to accept and consider additional evidence. The Commissioner(Appeals) being a fact finding authority, is competent to peruse, verify and appreciate evidence adduced by parties. Therefore, no merits in the contention raised by Revenue. - Decided against revenue

Summary

Issues: Revenue's challenge on credit for input services disallowed by original authority. Commissioner(Appeals) allowing additional evidence of original bills/invoices.

Analysis:
1. Challenge by Revenue on disallowance of credit: The appeal was filed by Revenue challenging the order passed by Commissioner(Appeals) which allowed credit on various input services. The original authority disallowed the credit based on several observations, including the absence of original copies of bills/invoices, bills issued in the name of the Head Office, lack of service tax registration number on some bills, and utilization of services for transportation of goods. The adjudicating authority confirmed the demand along with interest and penalty. The appellants then appealed to the Commissioner(Appeals), submitting the original bills and invoices, which led to the appeal being allowed in favor of the respondents. This action prompted Revenue to file the current appeal.

2. Acceptance of additional evidence by Commissioner(Appeals): The main contention raised by the appellant/Revenue was whether the Commissioner(Appeals) had the power to accept and consider additional evidence, specifically the originals of bills/invoices. The appellant argued that the Commissioner(Appeals) could only accept additional evidence in situations provided for in Rule 5 of the Central Excise Rules, 2001. The appellant contended that the act of the Commissioner(Appeals) in accepting additional evidence and allowing the credit was against the law. However, the Tribunal noted that the evidence produced by the respondents before the Commissioner(Appeals) was the originals of the invoices/bills, which were already produced in photocopy form before the original authority. There was no discrepancy between the photocopies and originals, and it was undisputed that service tax was paid as per the invoices. Rule 5 of the Central Excise Rules 2001 allows for the production of additional evidence before the Commissioner(Appeals), and the rule does not restrict the Commissioner(Appeals) from accepting and considering additional evidence. As a fact-finding authority, the Commissioner(Appeals) is empowered to peruse, verify, and appreciate the evidence presented by the parties. Therefore, the Tribunal found no merit in Revenue's contention and upheld the decision of the Commissioner(Appeals) to allow the additional evidence and credit on input services.

3. Conclusion: The Tribunal dismissed the appeal, affirming the decision of the Commissioner(Appeals) to allow the credit on input services based on the additional evidence of original bills and invoices presented during the appeal process. The Tribunal emphasized the Commissioner(Appeals)'s authority to accept and consider such evidence in the course of adjudicating appeals.