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2019 (6) TMI 567 - AT - Service TaxCENVAT credit - time limitation - credit was denied on the ground that the same was availed after six months from the date of the document - proper verification not done by authorities below - principles of natural justice - HELD THAT - The amendment in Rule 4(7) of CCR 2004 by Notification No. 21/2014-CE dated 11.07.2014 is applicable prospectively and not retrospectively - in view of the decision in the case of mportal Wireless Solutions 2011 (9) TMI 450 - KARNATAKA HIGH COURT it is not necessary to get registration in order to avail CENVAT credit - The appellant is entitled to CENVAT credit if he fulfills the conditions for availing the credit as provided in Rule 3(1). Rule 3(1) provides no condition regarding registration or regarding filing Returns to avail credit. Principles of natural justice - HELD THAT - The assessee has enclosed with the Appeal Memorandum copy of their ledger account (Service Tax input account) for the period from April 2012 up to March 2016 in which he has given all the details regarding the availment of CENVAT credit and has also maintained proper books of accounts which have not been considered by both the authorities below - Further in the Ground of Appeal the appellant has stated that the detailed computation regarding the payment of Service Tax for both the years were given before both the authorities below but both the authorities did not consider the same. This case needs to be remanded back to the original authority to pass a de novo order after examining the books of accounts of the appellant and after verifying the fact of payment of tax for both the years as alleged by the appellant to have been paid - appeal allowed by way of remand.
Issues:
- Confirmation of demand under proviso to Section 73(1) of the Finance Act for the period 2012-13 and 2013-14 - Imposition of interest under Section 75 and equal penalty under Section 78 of the Finance Act - Imposition of penalty of &8377; 10,000 under Section 77 and penalty under Section 70 for non-filing Returns Analysis: Confirmation of Demand under Proviso to Section 73(1) of the Finance Act: The case involved a demand of &8377; 14,20,564 for the years 2012-13 and 2013-14 due to alleged short payment of Service Tax. The appellant argued that there was no short-payment as they had paid Service Tax on the full value but failed to disclose it in the ST-3 Returns due to inadvertent errors. The appellant contended that the impugned order failed to consider their detailed computation showing no dues pending. The Tribunal found that the denial of CENVAT credit was solely based on a time restriction, which was not applicable retrospectively as per past judicial decisions. The order was remanded for a fresh decision after examining the books of accounts and verifying the tax payments. Imposition of Interest and Penalties: The Commissioner (Appeals) had confirmed the interest and penalties imposed under various sections of the Finance Act. The appellant argued that there was no suppression or misstatement on their part and that the penalties were unjustified. The Tribunal noted that the impugned order did not provide statutory backing for the denial of credit based on ST-3 Returns. It was observed that the appellant had maintained proper books of accounts, which were not adequately considered by the authorities. The case was remanded for a reevaluation of the penalties in light of the principles of natural justice. Imposition of Penalty for Non-filing Returns: The penalty under Section 70 for non-filing Returns was also confirmed in the impugned order. The appellant contended that registration or filing Returns was not a prerequisite for availing credit as per Rule 3(1) of the CENVAT Credit Rules, 2004. The Tribunal agreed that registration was not mandatory for availing credit and that the denial of credit based on ST-3 Returns was not legally sustainable. The case was remanded for a fresh decision considering the appellant's submissions and ledger accounts. In conclusion, the Tribunal allowed the appeal by remanding the case to the original authority for a de novo order, emphasizing the need to reexamine the books of accounts and verify the tax payments before making a final decision.
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