2017 (5) TMI 958 - AT - Service Tax

Site Formation & Clearance services - Supply of Tangible Goods for Use - short payment of service tax - Held that - on a specific query from bench, non-production of duty paying documents was affirmed nor the same are produced before us to come to any conclusion. The adjudicating authority was correct in denying the CENVAT credit - penalty rightly imposed under the provisions of Section 78 of the FA, 1994 as appellant is not able to convince us that there a bonafide belief in non/short payment of government dues - demand upheld - appeal dismissed - decided against assessee.

Summary

Issues:
1. Short payment of service tax on specific services.
2. Eligibility to avail CENVAT credit.
3. Imposition of penalties.

Short Payment of Service Tax:
The appellant was engaged in providing various services and hiring out equipment, leading to a short payment of service tax on certain services. The authorities issued a show-cause notice, which the appellant contested, claiming that they had discharged the service tax demands by debiting in the Cenvat account. The adjudicating authority granted relief to the appellant regarding tax on certain services but upheld the tax liability on others, citing the appellant's failure to produce documentary evidence. The authority also imposed penalties and appropriated the tax paid by the appellant on other services.

Eligibility to Avail CENVAT Credit:
The main issue before the tribunal was the eligibility of the appellant to avail CENVAT credit and discharge tax liabilities by using such credit. The adjudicating authority had recorded specific findings regarding the CENVAT credit claimed by the appellant. The tribunal noted that the appellant failed to produce duty-paying documents or relevant invoices to support their claim for CENVAT credit. Consequently, the tribunal upheld the authority's decision to deny the CENVAT credit, as the appellant could not prove that the credits did not pertain to exempted services or that capital goods were not exclusively used for exempted services. The tribunal found no merit in the appellant's appeal on this point and upheld the denial of CENVAT credit.

Imposition of Penalties:
Regarding the imposition of penalties, the tribunal found that the adjudicating authority correctly invoked the provisions of Section 78 of the Finance Act, 1994. The appellant failed to demonstrate a bona fide belief in the non/short payment of government dues or provide justifiable reasons to invoke Section 80 of the Finance Act, 1994. Consequently, the tribunal upheld the penalties imposed on the appellant. In conclusion, the tribunal found no merits in the appeal, rejected it, and upheld the impugned order as correct and legal, stating that it did not require any interference. The order was pronounced in court on 07/04/2017.