2021 (5) TMI 283 - AT - Service Tax

Reversal of excess availed CENVAT Credit - inadvertent mistake/clerical mistake of the appellant while filing ST-3 return ending March 2014 - HELD THAT - It is a fact on record that for the period ending 31.03.2014, the appellant shown the balance in cenvet credit as 1,05,705/- in their ST-3 return and opening balance on 01.04.2014 was shown as 4,71,397/-. In these circumstances, it is crucial to examine the records of the appellant pertaining to cenvet credit account whether the appellant has inadvertently made a mistake while filing the ST-3 return for the quarter ending March 2014 or intentionally has taken the excess cenvet credit on 01.04.2014. These facts can be verified from the records of the appellant. The said ascertainment of the said fact was to be done by the adjudicating authority which the adjudicating authority has not done at the time of adjudication after issuance of show cause notice to the appellant. The adjudicating authority is directed to verify the records of the appellant within a reasonable time. The matter is remanded back to the adjudicating authority to verify the records and pass an appropriate order - Appeal disposed off by way of remand.

Summary

Issues:
Appeal against denial of cenvat credit and imposition of penalty.

Analysis:
The appellant, a service provider registered under Mandap Keeper and Renting of Immovable Property Service, appealed against the denial of cenvat credit amounting to ?3,88,954 and the imposition of an equivalent penalty. The appellant had shown an opening balance of cenvat credit as ?4,71,397 in their ST-3 return for the period ending 31.03.2014, whereas the closing balance was erroneously shown as ?1,05,705 in the subsequent return. The appellant claimed that this discrepancy was an inadvertent mistake while filing the return. The appellant argued that they could not file a revised return but maintained that the cenvat credit account balance was accurate. The authorities below denied the credit, leading to the appeal.

The appellant contended that the discrepancy in the cenvat credit balance was due to an inadvertent or clerical error while filing the ST-3 return for March 2014. The appellant's representative argued that the correct opening balance was indeed ?4,71,397, and the denial of credit was unjustified. On the contrary, the Authorized Representative for the respondent argued that since no revised return was filed for March 2014, the appellant was not entitled to claim the cenvat credit. The respondent urged for the dismissal of the appeal.

Upon hearing both parties, the Tribunal observed that the discrepancy in the cenvat credit balance needed verification. The Tribunal noted that the adjudicating authority had not properly examined whether the error was inadvertent or intentional. Therefore, the matter was remanded back to the adjudicating authority for a detailed verification of the appellant's records. The Tribunal directed the authority to ascertain if the appellant had the correct closing balance on 31.03.2014 as claimed. If the balance was indeed ?4,71,397, the appellant should be granted the benefit of the mistake. However, if the balance did not match, the credit was to be denied, and a penalty imposed accordingly. The Tribunal emphasized the need for a thorough examination of the records and instructed the adjudicating authority to pass an appropriate order based on the findings.

In conclusion, the appeal was disposed of by way of remand, with the adjudicating authority directed to verify the records promptly and make a decision based on the findings.