2018 (9) TMI 1145 - AT - Service Tax

Reversal of CENVAT credit - Held that - When the assessee has pleaded that even the copy of the CENVAT Register was produced, that perhaps is sufficient to examine the veracity of the assessee s claim that it did reflect the reversed CENVAT. But, I see no finding at all either in the Order-in-Original or in the impugned order of the lower appellate authority on these documentary evidences and the orders therefore are not speaking orders. The issue requires re-examination by the adjudicating authority - appeal allowed by way of remand.

Summary

Issues:
1. Reversal of proportionate credit attributable to exempted service under Rule 6(3A).
2. Demand raised by the adjudicating authority.
3. Confirmation of demand by the Commissioner (Appeals).
4. Setting aside of penalty under Section 77 of the Finance Act, 1994.

Analysis:
1. The appellant, engaged in sales and services of Maruti vehicles, reversed proportionate credit attributable to exempted service in compliance with Rule 6(3A) from July 2012 to March 2014. The appellant claimed to have utilized only a small portion of the CENVAT Credit, with the remaining balance being reversed to the respective expense account. The appellant provided documentary evidence, including ST-3 returns, a working sheet of the CENVAT reversal, and the CENVAT Register for the period in question. Despite this, the adjudicating authority confirmed the demand of ?9,97,457, along with interest and penalty.

2. The appellant appealed to the Commissioner (Appeals) at Chennai, who upheld the demand but set aside the penalty under Section 77 of the Finance Act, 1994. The appellant contested this decision, arguing that the lower authorities failed to properly appreciate the documentary evidence submitted. The appellant highlighted that the documents, such as the CENVAT Register, were not adequately examined, leading to a lack of findings on the veracity of the appellant's claims.

3. In light of the deficiencies in the lower authorities' orders, the appellate tribunal set aside both decisions and remitted the matter back to the adjudicating authority for re-examination. The tribunal emphasized the need for a speaking order that considers all relevant documentary evidence and affords the appellant reasonable opportunities to present additional documents if necessary. The tribunal allowed the appeal by way of remand, leaving all contentions open for further review.

4. The judgment, delivered by a Member (Judicial) of the Appellate Tribunal CESTAT Chennai on July 19, 2018, focused on the procedural shortcomings in the assessment of the appellant's case regarding the reversal of CENVAT Credit. By ordering a remand for a fresh examination of the issue, the tribunal aimed to ensure a fair and thorough consideration of the appellant's submissions and evidence.