2023 (6) TMI 845 - AT - Service Tax

Benefit of abatement under N/N. 01/2006 dated 01.03.2006 on Commercial Construction Service - benefit denied on the ground that assessee had taken cenvat credit of service tax on input services used for providing commercial or industrial construction service (CICS) - HELD THAT - To check that whether the respondent assessee has availed cenvat credit on input or input services or capital goods used in providing Commercial Construction Service, it is a matter of fact which needs to be verified from the statutory record of the service tax as well as the Financial Accounts of the respondent assessee. The Adjudicating Authority has physically verified the ST-3 return for the relevant period. He has also taken a chartered accountant certificate in lieu of the verification wherein whether the cenvat credit on the input and input service and capital goods is availed by the respondent assessee or not for basically making them enable to avail the benefit of abatement under Notification No. 01/2006 dated 01.03.2006. The department in its appeal memo has not mentioned anything to disprove the decision reached by the adjudicating authority of dropping the demand as the basic allegations in the show cause notice were not supported by any evidences. It is a matter of record that the adjudicating authority has verified statutory return like ST 3 return as well as qualified Chartered Accountant has verified and given certificate to the Adjudicating Authority. The adjudicating authority has correctly reached at the conclusion that input or input services cenvat credit has not been availed by the respondent assessee while performing the Commercial and Industrial Construction Service - the appeal is without any merit and therefore, deserves to be dismissed.

Summary

Issues involved:
The issues involved in the judgment are the availment of cenvat credit on input services for providing taxable services under various categories, the applicability of Notification No. 01/2006-ST dated 01.03.2006, and the demand of service tax along with penal provisions under section 76, 77, and 78 of the Finance Act, 1994.

Summary of Judgment:

Issue 1: Availment of Cenvat Credit on Input Services
The respondent, engaged in providing taxable services, had paid service tax under the Commercial Construction Service (CCS) category after availing abatement of 67%, despite utilizing cenvat credit on input services. The department issued a show cause notice demanding service tax, which was later dropped by the adjudicating authority. The department appealed, challenging the order on grounds related to the availment of cenvat credit on inputs and input services for providing taxable services under the CCS category.

Issue 2: Interpretation of Notification No. 01/2006-ST
During the appeal, the respondent contended that cenvat credit availed on other services was used for paying service tax under the construction service category. The department alleged that the respondent had availed cenvat credit on input services used for providing various services but not for Commercial & Industrial Construction Service, as per the conditions of Notification No. 01/2006-ST. The respondent argued that the notification does not bar them from utilizing cenvat credit on other services for discharging service tax liability under Commercial & Industrial Construction Service.

Judgment Analysis:
The Adjudicating Authority found no violation of the notification as the respondent had not availed cenvat credit on inputs or input services used for Commercial & Industrial Construction Service. The authority verified statutory returns and received a certificate from a Chartered Accountant confirming the non-availment of cenvat credit. The reviewing authority did not disprove these findings. The Tribunal upheld the original order, stating that there was no fault in it, and dismissed the appeal, pronouncing the decision on 14.06.2023. The judgment emphasized the importance of verifying factual records and upheld the authority's decision based on evidence presented during the hearing.

By maintaining a thorough analysis of the issues involved and the judgment's key points, the summary provides a clear understanding of the legal aspects and decision-making process in the case.