2022 (12) TMI 10 - AT - Service Tax

Recovery of wrongly availed CENVAT Credit - want of requisite documents - requirement of duty paying documents as per Rule 9 of CCR - period from October 2014 to June, 2017 - non deposit of mandatory amount - extended period of limitation - suppression of facts or not - HELD THAT - From paragraph 12 of Order-in-Original, it is abundantly clear that duly verified copies of payment vouchers and official bills generated for payment of telephonic bills and RSRTC subsidy bill for the period in question were duly provided by the appellant to the Adjudicating Authority. The authority has also acknowledged the same. The Original Authority has recorded that since the record was voluminous that the appellant was required to submit month-wise of Cenvat credit availed details from October, 2014 to June 2017 ( the period in question) pointing out the specific documents for the respective entry with respect to the amount in question. The said detail was also provided by the appellant to the Adjudicating Authority. Not only this, those documents were also got checked and verified by the Jurisdictional RO. The demand has been confirmed based on the verification report of the said Jurisdictional RO. He has reported that the documents were not prescribed in terms of provision of Rule 9(1) of Cenvat Credit Rules, 2004 and Rule 11 of Central Excise Rules, 2002, as the month-wise bifurcation was not provided. This reason, to my opinion, is not the requirement of Rule 9(1) of Cenvat Credit Rules. The Rule requires invoices with such details as mentioned in the Rule. There is no denial that requisite details were available in the documents provided. Also as per the Verifying officer the amount calculated is Rs.1,42,193/- instead of Rs.1,81,911/-. The said requisite documents were provided at the initial stage of adjudication itself. Otherwise also proviso to Rule 9 shows that if the documents as submitted by the appellants contain all such particulars as are mentioned in the invoices or payment received, then also the Cenvat credit is to be allowed. The Adjudicating authority below has miserably failed to consider the said proviso - documents having all requisite particulars were duly been given to the Original Adjudicating Authority itself. The Authority was rather facilitated by the Counsel with the precise information out of the voluminous record with respect to the period in question. Denying the Cenvat credit based on such documents is therefore, held to be wrong and unreasonable. Non deposit of mandatory amount i.e. 7.5% of the demand confirmed at the time of filing of appeal before the Commissioner (Appeals) - HELD THAT - While filing this appeal before Tribunal 10% of the amount of demand confirmed has been deposited by the appellant. The Challan date 8.06.2022 for an amount of Rs. 18,192/- is perused on record. In terms of Section 35F of Central Excise Act, 1944, 10% of the amount confirmed has to be deposited in total till filing the appeal before this Tribunal. That is to say amount equal to 7.5% of the demand confirmed is to be filed before the Commissioner (Appeals) and remaining 2.5% of the demand confirmed is to be deposited prior to filing the appeal before this Tribunal. As already held above entire 10% of the amount of duty confirmed against the appellant stands already deposited and also that the Commissioner (Appeals) has decided the appeal on merits as well, there remains no need of remanding back the matter to Commissioner (Appeals). The findings of Commissioner (Appeals) are no more sustainable on the preliminary issue of lack of mandatory pre-deposit and findings on merits have already been held as wrong. Extended period of limitation - suppression of facts or not - HELD THAT - The appellants had provided all the requisite documents before the Departmental Authorities there remains no evidence to prove the alleged suppression. It is not the case of the department that service tax was not paid by the appellants. Mere allegation of documents to be improper cannot be the admissible evidence to prove that there was an intent to evade tax liability. Otherwise also, the appellant is a public utility authority, i.e. Government organisation. No motive rests with the appellant to have any intent to evade their liability which otherwise stand duly discharged - all documents with requisite details were made available. Accordingly, the Show Cause Notice itself is barred by time. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Confirmation of wrongly availed Cenvat Credit without valid documents
- Rejection of appeal by Commissioner (Appeals) for lack of mandatory pre-deposit
- Invocation of extended period of limitation without alleging suppression

Confirmation of wrongly availed Cenvat Credit:
The appellant, engaged in taxable services, challenged the demand of Rs.1,81,911 for wrongly availed Cenvat Credit from October 2014 to June 2017. The Order-in-Original confirmed by the Commissioner (Appeals) alleged lack of requisite documents. The appellant provided payment vouchers and bills, but the demand was upheld. The Tribunal noted that the documents contained necessary details, contrary to the Adjudicating Authority's claim. The demand was based on a verification report citing non-compliance with specific rules, which the Tribunal found irrelevant. The amount calculated was also disputed. The Tribunal held that the Authority wrongly emphasized findings not linked to the rules' requirements, ultimately setting aside the order.

Rejection of Appeal for Lack of Mandatory Pre-deposit:
The Department argued that the Commissioner (Appeals) rejected the appeal due to a mandatory pre-deposit non-compliance. However, the appellant had deposited 10% of the confirmed amount while filing the appeal before the Tribunal, fulfilling the requirement under Section 35F of the Central Excise Act, 1944. As the Commissioner (Appeals) had already decided on merits and the full deposit was made, the Tribunal found no need for remand. The Tribunal deemed the Commissioner's findings unsustainable on the lack of pre-deposit issue and the erroneous merits decision.

Invocation of Extended Period of Limitation without Alleging Suppression:
The Show Cause Notice issued for the demand from October 2014 to June 2017 invoked the extended period without alleging suppression. The Adjudicating Authority justified this based on the appellant's alleged non-disclosure of Cenvat Credit details. However, the appellant had provided all necessary documents, and no evidence of suppression was found. The Tribunal held that the Notice was time-barred, as the appellant, a public utility authority, had no motive to evade tax. All required details were provided, and the tax liability was discharged. Consequently, the Tribunal set aside the order and allowed the appeal based on the discussions and findings presented.