2024 (5) TMI 413 - AT - Service Tax

Recovery of CENVAT Credit wrongly availed - construction of Residential Complex Service - non-payment of service tax on the same - Rule 4 (7) of Cenvat Credit Rules, 2004 - HELD THAT - From the appeal memo itself it is observed that the amount as was retained in the name of security was admittedly not released to M/s. S.S. Infratech. Resultantly, it is very much apparent on record that the appellant has failed to make the full payment against the invoice issued by M/s. S.S. Infratech resulting into the show payment on amount of Rs. Rs.15,00,831.81/- as was found by the department to be outstanding as on 31.03.2017. It was the appellant s burden to prove that the retained amount was not released for want of due certification of the satisfaction by the architect. In absence thereof, the amount retained is rightly held to have been wrongly retained. There are no reason to differ from these findings otherwise also the appellant has opted to remain absent and has opted to not to produce any evidence to prove that the payment has been retained in furtherance of the agreement between the appellant and M/s. S.S. Infratech. The order under challenge is hereby upheld - Appeal dismissed.

Summary

Issues:
The issues involved in the judgment are the recovery of service tax amount, reversal of Cenvat credit, imposition of interest and penalties, failure to appear before the Tribunal, non-payment of service tax by the appellant, and retention of security deposit.

Recovery of Service Tax Amount:
The appellant, registered for providing taxable services, engaged M/s. S.S. Infratech for constructing a residential complex. The department observed that the service tax amount of Rs.1,89,235/- was not paid by the appellant, although Cenvat credit of the same amount was availed. The recovery of the service tax amount was proposed under Rule 4(7) of Cenvat Credit Rules, 2004.

Imposition of Interest and Penalties:
In addition to the service tax amount, an interest of Rs.1,279/- was proposed to be recovered for non-reversal of Cenvat credit within the prescribed time limit. The department also proposed to impose appropriate penalties on the appellant, which were confirmed in the Order-in-Original and Order-in-Appeal.

Failure to Appear Before the Tribunal:
Despite multiple opportunities given to the appellant to appear before the Tribunal, the appellant and the Authorized Representative remained absent. The Tribunal warned the appellant to mark their presence, but no appearance was made. Consequently, the opportunity for the appellant to pursue the appeal was closed, and the arguments on behalf of the department were heard.

Non-Payment of Service Tax and Retention of Security Deposit:
The appellant received construction services from M/s. S.S. Infratech but failed to make full payment against the invoice issued by the service provider. The appellant retained a security deposit of 5% of each demand/bill, which was not released after the completion of the work. As a result, an outstanding amount of Rs.15,00,831.81/- was found as on 31.03.2017. The appellant's failure to prove the non-release of the retained amount led to the conclusion that the amount was wrongly retained.

Conclusion:
The Tribunal upheld the findings that the appellant did not pay the service tax amount to the service provider within the stipulated time period. Due to the absence of the appellant and lack of evidence to support their case, the order under challenge was upheld, and the appeal was dismissed.