2018 (12) TMI 366 - AT - Service Tax

Short payment of service tax - mining of mineral oil or gas services provided to Madhya Pradesh State Mining Corporation Ltd. - suppression of facts - penalty - Held that - There appears no infirmity in the findings based on the statement of services provided during the relevant year as provided by the appellant alongwith the ledger accounts of the service recipients that the appellant have paid service tax in excess during the period in question and that the charge of short payment of service tax as alleged in Show Cause Notice is not based on any evidential proof - demand withheld. CENVAT credit wrongly availed - wrongly availed credit utilised for payment of service tax for the period July-September 2012-13 - the credit has been availed on the purchase of two machines vide two invoices dated 06.06.2011 and 24.12.2011 which were to be used to execute the work order of mining between the Corporation and the appellant - Held that - The credit is rather permissible to be taken on both these machines by the appellants in another unit irrespective of the invoices showing the different address of the appellant - Even the CBEC Circular as relied upon by the appellant has clarified that where the goods are ordered by registered / head office of the assessee and the invoice does not bear the consignee address the credit ought not to be denied - credit allowed. Lapse of procedural compliance - rule 9 of CCR - Held that - The Larger Bench of this Tribunal in the case Kamakhya Steel Vs. C.C.E. 2000 (8) TMI 113 - CEGAT NEW DELHI has consistently held that once duty paid character of goods receipt at works and utilisation thereof stood established credit ought not to be denied on procedural lapses/ minor deviations - the findings of Commissioner(Appeals) that the invoices produced by appellant are not containing correct address of the appellants registered premises but are having address of their other premises has wrongly been considered as a ground to deny the availment of cenvat credit on the capital goods used by the appellants for providing the output service - credit allowed. Non-payment of late fees - ST-return for the period April-September 2011-12 filed on 22.04.2012 i.e. after a delay of 98 days - Held that - It is observed that details of amount received and service tax paid for the last 5 years of period in dispute were provided by the appellant to the Department. Based thereupon it is the finding of the authorities below that the service tax was paid in excess by the appellant during the period in question. Confirming the demand of late fee is apparently a contradictory finding and resultantly is not sustainable - demand set aside. Penalty - Held that - The onus was of the Department to prove the suppression of fact on part of the appellant to evade the payment of duty but the record of the matter and even the findings of the appellate authority are sufficient to prove that the appellant has been paying the excess duty for some of the financial years of the period in dispute and had been adjusting the same qua short payment is sufficient to hold that there is no intent to evade the duty. In absence thereof no question arises for imposition of penalty - penalty set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Alleged short payment of service tax and suppression of facts.
2. Wrong availing of cenvat credit on capital goods.
3. Delay in filing ST-return and non-payment of late fee.

Issue 1: Alleged short payment of service tax and suppression of facts:
The appellant was accused of short paying service tax and suppressing facts from the Department for the financial years 2011-12 to 2015-16. A show cause notice was issued proposing a demand and late fee. The initial order dropped the demand but confirmed other allegations. The Commissioner(Appeals) upheld the initial order. The Tribunal found no infirmity in the findings based on the services provided and ledger accounts, upholding the decision.

Issue 2: Wrong availing of cenvat credit on capital goods:
The appellant availed cenvat credit on two machines purchased for mining contracts, which were diverted to a different site than intended. The Tribunal observed that the credit was rightfully availed for the site where the machines were used, despite invoices showing a different address. Relying on precedents and CBEC Circulars, the Tribunal set aside the denial of cenvat credit and late fee imposition.

Issue 3: Delay in filing ST-return and non-payment of late fee:
The appellant filed ST-returns with minor discrepancies, leading to allegations of non-compliance with Cenvat Credit Rules. However, the Tribunal held that the procedural lapses should not defeat the claim if goods were received, used, and duty paid. Citing legal precedents, the Tribunal set aside the findings regarding the denial of cenvat credit and late fee imposition. The penalty imposition was also overturned due to the lack of evidence of intent to evade duty.

In conclusion, the Tribunal set aside the initial order, allowing the appeal in favor of the appellant based on detailed analysis and legal interpretations of the issues raised in the case.