2018 (7) TMI 1792 - AT - Service Tax

CENVAT Credit - duty paying documents - credit denied on the ground that they have not been able to produce the relevant documents for the purpose of availment of credit - Time Limitation - Held that - The credit can be availed only on the basis of the eligible documents and if an assessee does not have the documents in their possession, the credit cannot be claimed by them. However, the demand is barred by limitation - SCN issued on 17/08/2010 covers the period October, 2005 to September, 2009 and stands issued by invoking the longer period of limitation - there is neither any allegation nor any evidence to suggest that the appellants had taken the said credit, with a mala-fide mind. The credit was availed by them, by reflecting the same in statutory records and was a part of the returns being filed by them - The appellant being in the Banking Sector, cannot be expected to indulge in such clandestine availment of small amounts of Cenvat credit, when they are dealing with the huge transactions and are paying huge taxes. Matter remanded to Original Adjudicating Authority for quantification of the amount, if any, falls within the normal period - Appeal allowed by way of remand.

Summary

Issues:
1. Availment of Cenvat credit on input services.
2. Denial of credit due to lack of relevant documents.
3. Disallowance of credit for specific amount.
4. Admissibility of credit based on eligible documents.
5. Applicability of limitation period for demand.

Analysis:
1. The appellant, engaged in providing taxable services under "Banking & Other Financial Services," availed Cenvat credit of Service Tax paid on input services amounting to approximately ?22.88 lakhs between October 2005 and September 2009.

2. A Show Cause Notice was issued to the appellants proposing to deny the credit due to their inability to produce relevant documents. While the appellant submitted Original Bills/Invoices totaling ?19,24,579, a portion of ?3,64,372 credit was disallowed by the Adjudicating Authority for lack of documentation, along with imposition of penalty.

3. The appellants contended that they availed credit based on received Bills/Invoices, some of which were misplaced and not produced during adjudication. They challenged the denial of credit and imposition of penalty, arguing that the demand was barred by limitation.

4. The lower authorities rejected the appellant's plea, emphasizing the necessity of eligible documents for credit availment. However, the Tribunal acknowledged the appellant's submission regarding limitation. The Show Cause Notice covered the period from October 2005 to September 2009, but lacked evidence of mala-fide intent in credit availing. Given the absence of proof, the demand was held to be barred by limitation.

5. The Tribunal remanded the matter to the Original Adjudicating Authority to quantify the demand falling within the limitation period. Additionally, penalties imposed on the appellant were set aside, concluding the appeal with the dismissal of the case in the specified manner.