2018 (12) TMI 940 - AT - Service Tax

Principles of Natural Justice - CENVAT Credit - case of appellant is that the allegation of department of excess credit availed is imaginary and not supported by any evidence - Held that - The Commissioner had not considered several aspects and evidences on record. The impugned order is accordingly liable to be set aside - matter remanded to the adjudicating authority to decide the matter afresh and to pass order in accordance with law - appeal allowed by way of remand.

Issues:
1. Confirmation of demand by Commissioner of Central Excise and Service Tax
2. Imposition of penalty under Section 78 of the Act
3. Allegations of wrongful availment of CENVAT Credit
4. Discrepancies in tax payments and CENVAT Credit utilization
5. Consideration of evidences and submissions by both parties
6. Justification of the impugned order by the Commissioner
7. Appeal for setting aside the impugned order and remand for fresh decision

Confirmation of demand by Commissioner of Central Excise and Service Tax:
The judgment involves challenges by both the assessee and the Department against the impugned order confirming a demand of ?2,99,111/- along with interest and penalty under Section 78 of the Act. The appeals by both parties were heard together for disposal. The Department alleged wrongful availment of CENVAT Credit for the assessment year 2007-08 based on an audit conducted at the assessee's premises. The assessee contended that the order was passed in a mechanical manner without considering evidence on record, and certain entries in the sub-ledger did not attract taxes. The Department argued that the assessee had short paid Service Tax and Education cess, suppressed tax liability, and utilized excess CENVAT Credit. The Tribunal found that the Commissioner had not considered various aspects and evidences, leading to the impugned order being set aside and the matter remanded for fresh decision within three months.

Imposition of penalty under Section 78 of the Act:
The impugned order imposed a penalty of equal amount under Section 78 of the Act on the assessee. The Department contended that the Commissioner was not justified in confirming the demand less than the account proposed in the Show Cause Notice. The Department's representative argued against the adjustments made by the Commissioner and sought to enhance the service tax liability on the assessee. However, the Tribunal found that the Commissioner had not considered crucial aspects and evidence, leading to the decision to set aside the impugned order and remand the matter for fresh adjudication.

Allegations of wrongful availment of CENVAT Credit:
The Department alleged that the assessee wrongfully availed CENVAT Credit for the assessment year 2007-08, leading to a Show Cause Notice. The assessee clarified the issues raised in the notice, arguing that the Department had not considered evidence on record and passed the order in a mechanical manner. The Department claimed that the assessee had utilized excess CENVAT Credit, while the assessee contended that the allegations were imaginary and unsupported by evidence. The Tribunal found discrepancies in the Department's analysis and directed a remand for fresh adjudication.

Discrepancies in tax payments and CENVAT Credit utilization:
The Department argued that the assessee had short paid Service Tax and Education cess, suppressed tax liability, and utilized excess CENVAT Credit. The Department representative highlighted specific amounts allegedly short paid and suppressed by the assessee. The Tribunal noted the contentions of both parties regarding tax payments and CENVAT Credit utilization, ultimately finding that the Commissioner had not considered crucial aspects and evidence, leading to the decision to set aside the impugned order and remand the matter for fresh adjudication.

Consideration of evidences and submissions by both parties:
The Tribunal considered the submissions and arguments presented by both the assessee and the Department. It was observed that the Commissioner had not adequately considered various aspects and evidence on record while passing the impugned order. This lack of consideration led to the decision to set aside the order and remand the matter for fresh adjudication by the adjudicating authority within three months.

Justification of the impugned order by the Commissioner:
The Department sought justification for the impugned order, arguing against the adjustments made by the Commissioner and seeking to enhance the service tax liability on the assessee. However, the Tribunal found that the Commissioner had not considered crucial aspects and evidence, leading to the decision to set aside the impugned order and remand the matter for fresh adjudication.

Appeal for setting aside the impugned order and remand for fresh decision:
Both the assessee and the Department appealed against the impugned order, leading to both appeals being heard together for disposal. The Tribunal found that the Commissioner had not adequately considered various aspects and evidence on record, resulting in the decision to set aside the impugned order and remand the matter for fresh adjudication within three months.

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