2018 (4) TMI 1404 - AT - Service Tax

CENVAT credit - capital goods - input services - penalty - Held that - the appellant could not lead evidence before the court below in support of taking Cenvat Credit, as the purchases are made by the Circle Telecom Store Depot (CTSD) which are subsequently received by the appellant unit at Fatehpur, as there was lack of communication between the offices and also the concerned personnel being on leave for some reason or the other - matter is remanded to the Adjudicating Authority who shall hear the appellant denovo and pass a reasoned order in accordance with law - appeal allowed by way of remand.

Summary

Issues:
Appeal against rejection of Cenvat Credit for capital goods and input services, penalty under Rule 15 of CCR read with Section 78 of the Finance Act.

Analysis:
The appellant, Bharat Sanchar Nigam Limited, filed an appeal challenging the rejection of Cenvat Credit amounting to ?15,26,666 for capital goods and ?14,81,994 for input services, along with an equal penalty under Rule 15 of the Cenvat Credit Rules read with Section 78 of the Finance Act. After hearing the arguments from both parties and examining the appeal records, it was noted that the appellant failed to provide evidence before the lower court to support their claim for Cenvat Credit. The purchases were made by the Circle Telecom Store Depot (CTSD) and then received by the appellant unit at Fatehpur. The lack of communication between offices and the absence of relevant personnel due to various reasons hindered the submission of evidence. In the interest of justice, the appeal was allowed by way of remand. The impugned order was set aside, and the matter was remanded to the Adjudicating Authority for a fresh hearing. The Adjudicating Authority was directed to hear the appellant afresh and issue a reasoned order in compliance with the law. The appellant was instructed to appear before the Adjudicating Authority within 30 days from the receipt of the order copy, along with a reply to the show cause notice and any supporting evidence they intended to present.

This judgment highlights the importance of providing sufficient evidence to support claims for Cenvat Credit. The failure to present evidence due to communication gaps and personnel unavailability led to the rejection of the credit initially. The decision to remand the matter for a fresh hearing underscores the principle of ensuring a fair opportunity for parties to substantiate their claims. The directive for the appellant to appear with necessary documents within a specified timeframe emphasizes the procedural requirements for presenting a case effectively before the Adjudicating Authority. Overall, the judgment focuses on upholding the principles of natural justice and procedural fairness in adjudicating matters related to Cenvat Credit and penalties under the applicable legal provisions.