2018 (2) TMI 555 - AT - Central Excise

CENVAT credit - Advice Transfer Debits (ATDs) - Held that - the appellant could not produce the relevant ATDs for certain amount of credit availed and also some ATDs do not bear the requirement as per Rule 4A of STR 1944 - in the interest of justice, one more chance be accorded to the appellant to establish their case before the adjudicating authority - appeal allowed by way of remand.

Summary

Issues:
Appeal against order-in-original passed by Commissioner of Central Excise, Valsad regarding admissibility of Cenvat credit on Advice Transfer Debits (ATDs) for the period 2006-2011.

Analysis:
The appellant, a provider of Telecommunication services, availed Cenvat credit on ATDs amounting to &8377; 1,10,61,736/- and &8377; 4,00,111/- for specific periods. The Ld. Commissioner allowed credit of &8377; 80,66,183/- but confirmed demands of &8377; 29,95,552/- and &8377; 4,00,111/- with interest and penalty, leading to the appeal.

The appellant's representative argued that the disallowed balance of Cenvat credit was based on a report by the Jurisdictional Deputy Commissioner, highlighting discrepancies in the verification report. They contended that the confirmation of certain amounts as inadmissible due to improper documents was untenable in law. The appellant sought a remand to reconsider the verification report based on a chart submitted to support their claim of receiving and utilizing input services for output services.

On the Revenue's side, it was stated that the Ld. Adjudicating Authority reduced the total demand after verification by the Deputy Commissioner. The confirmed demands were for cases where relevant documents were not produced or were improper, leading to the inability to justify the receipt and utilization of services. The Revenue had no objection to remanding the case for further review.

The Tribunal observed that while ATDs were accepted as valid documents, some credits were disallowed due to the appellant's inability to produce relevant ATDs and discrepancies in meeting Rule 4A of Service Tax Rules, 1994 requirements. The Tribunal found merit in the appellant's argument regarding discrepancies in the Deputy Commissioner's report and decided to remand the matter for a fresh decision, allowing the appellant another opportunity to present evidence supporting the receipt and utilization of input services for output services. Consequently, the impugned order confirming the demand and penalties was set aside, and the appeal was allowed by way of remand.