2019 (8) TMI 491 - AT - Service Tax

CENVAT Credit - common input services used for taxable as well as exempt goods - Rule 6(3)(c) of the CENVAT Credit Rules, 2004 - non-maintenance of separate records - utilisation of CENVAT credit in excess of the percentage envisaged in Rule 6(3)(c) - suppression of facts - HELD THAT - The appellant is disputing the quantification from the very beginning while filing the reply to the show-cause notice itself. Further, the appellant has reversed the amount of ₹ 11,37,010/- along with interest of ₹ 2,18,128/- and informed the department. The previous authority after observing the reversal along with interest still held that the appellant was liable to reverse ₹ 14,21,259/-. This finding recorded by the previous authority as well as on remand by the adjudicating authority is factually incorrect and as per the detailed quantification, the appellant was required to reverse ₹ 11,37,010/-, which was reversed by them along with interest. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Violation of Rule 6(3)(c) of CENVAT Credit Rules, 2004 - Demand of excess CENVAT credit - Dispute over quantification of credit - Reversal of credit by the appellant - Adjudicating authority's findings - Appellant's appeal against the impugned order.

Analysis:
The appellant, engaged in courier services, availed CENVAT benefit for input services, including exempted services like international courier, co-loading, and export cargo. The department alleged a contravention of Rule 6(3)(c) of CENVAT Credit Rules, 2004, for not maintaining separate accounts for taxable and exempted services. The show-cause notice demanded recovery of excess CENVAT credit utilized, imposing penalties and interest. The appellant contested, reversed some credit, and paid interest. The adjudicating authority partly confirmed the demand, imposing penalties and interest. The appellant appealed, leading to a remand by the Tribunal for reconsideration.

Upon remand, the adjudicating authority confirmed the demand, stating the quantification was undisputed. The appellant challenged this, citing the reversal of credit, submissions, and detailed calculations provided earlier. The appellant argued that the previous findings and the current order's conclusions were factually incorrect. The appellant relied on various decisions to support their contentions.

The AR defended the impugned order, but the Tribunal found the appellant disputed the quantification from the beginning, reversed a specific amount with interest, and provided detailed calculations. The Tribunal noted discrepancies in the findings of the adjudicating authority, the appellant's submissions, and the previous order. The Tribunal concluded that the impugned order was not sustainable in law due to erroneous findings and discrepancies, setting it aside and allowing the appeal of the appellant.

In conclusion, the Tribunal found in favor of the appellant, setting aside the impugned order due to discrepancies in quantification, erroneous findings, and lack of sustainability in law. The appellant's appeal was allowed, highlighting the importance of accurate quantification and factual correctness in such matters.