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2021 (12) TMI 1049 - AT - Service TaxCENVAT Credit - input - non-submission of service tax invoice or some information was missing - short paid tax - suppression of turnover/non-disclosure of true turnovers in the Service Tax Return - levy of interest and penalty - invocation of extended period of limitation - HELD THAT - The cenvat credit of Rs. 3, 780/- with respect to the input service already received from the D.P. Khandelwal Co is allowed - So far the credit for service tax of Rs. 55, 282/- received from N.K. Buildcon is concerned matter remanded to the Original Adjudicating Authority with directions-if the assessee produces a certificate from N.K. Buildcon in support of this amount along with reference to Bill and Invoice No. the Adjudicating Authority shall accordingly allow this credit. Short payment of tax - Allegation of suppression of turnover/non-disclosure of true turnovers in the Service Tax Return - HELD THAT - The appellant has successfully reconciled their turnover figure as per Profit Loss Account and as per taxable turnover in the Service Tax Return. Accordingly this ground is allowed and the demand of Rs. 5, 50, 450/- is set aside. Invocation of extended period of limitation whether correctly done - Levy of interest under Section 75 and penalty under Section 78 - HELD THAT - The appellant is a State Government Undertaking where 100% shares are owned by the State Government through the Governor of the State. The appellant maintains proper books of accounts which are subjected to audit. There may be some clerical error in maintaining their records or as stated the documents got mis-placed due to shifting of the office. Further the appellant is working as a nodal agency for the Government Project(s) and are not a Commercial Organisation in the true sense. Further there is no allegation of suppression or any falsification of the accounts. From the allegations and facts on record it is observed that these are attributable to the clerical error and lack of proper reconciliation at the time of audit and before the court below - the extended period of limitation is not invokable. Accordingly penalty under Section 78 is set aside. The appeal is allowed and only the issue as regards cenvat credit of Rs. 55, 282/- (N.K. Buildcon) is remanded to the Original Adjudicating Authority - Appeal allowed in part and part matter on remand.
Issues involved:
1. Rejection of input tax credit 2. Allegation of suppression of turnover/non-disclosure of true turnovers in the Service Tax Return 3. Invocation of extended period of limitation 4. Levy of interest under Section 75 and penalty under Section 78 Analysis: Issue 1: Rejection of input tax credit The appellant, a State Government Undertaking, sought input tax credit for services received from D.P. Khandelwal & Co. and N.K. Buildcon. The Tribunal allowed the credit of Rs. 3,780/- for services from D.P. Khandelwal & Co. However, for the Rs. 55,282/- credit from N.K. Buildcon, the matter was remanded to the Original Adjudicating Authority pending submission of a certificate from N.K. Buildcon validating the amount and related documentation. Issue 2: Allegation of suppression of turnover The appellant demonstrated that discrepancies in turnover figures were due to exempted turnover during the financial year 2007-2008. The Tribunal found that the appellant reconciled the turnover figures as per Profit & Loss Account and taxable turnover in the Service Tax Return for other financial years. Consequently, the demand of Rs. 5,50,450/- was set aside. Issue 3: Invocation of extended period of limitation The Tribunal noted that the appellant, being a State Government Undertaking, maintained proper accounts subjected to audit. Any discrepancies were attributed to clerical errors or misplaced documents due to office relocation. As there was no suppression or falsification of accounts, the Tribunal held that the extended period of limitation was not applicable, setting aside the penalty under Section 78. Issue 4: Levy of interest and penalty The Tribunal allowed the appeal, remanding only the issue of the Rs. 55,282/- input tax credit to the Original Adjudicating Authority. The penalty under Section 78 was set aside, considering the circumstances of the case and the lack of intentional wrongdoing by the appellant. In conclusion, the Tribunal granted relief to the appellant on various issues, emphasizing proper documentation and reconciliation of turnover figures, while also considering the nature of the appellant as a State Government Undertaking in the context of the allegations and penalties imposed.
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