2022 (9) TMI 946 - SC - Service Tax

CENVAT credit irregularly availing/ wrongly utilizing - levy of service tax - Works Contract Service - failure to declare the full taxable value in ST-3 returns - failure to discharge the service tax on the gross receipts value - failure to have regularly and habitually retained the service tax collected from their clients - failure to file the Half Yearly ST-3 returns within the prescribed due dates - failure to apply correct service tax in the ST-3 returns - failure to furnish the CENVAT Credit availed details and copies of Invoices/bills on the strength of which they availed CENVAT Credit - period post 2007 - HELD THAT - It is not disputed by the assessee that the services rendered by the assessee and the contract entered into by the assessee be treated as Works Contract and therefore, the assessee is liable to pay the service tax. From the impugned order passed by the Tribunal, it appears that though the learned Tribunal has touched the aspect of wrong/irregular availment/utilization of CENVAT credit while narrating the facts, however, thereafter there is no further discussion at all on irregular/wrong utilization/availment of the CENVAT credit - It was the specific case on behalf of the Revenue that, without producing any invoices and/or other documentary evidences, the assessee was not justified in utilizing and/or availing the CENVAT credit. When a specific plea was raised and even the Adjudicating Authority specifically disallowed the availment or utilization of CENVAT credit, the learned Tribunal ought to have decided the said issue, which, as such, was the main controversy and even when a specific finding was given by the Adjudicating Authority while passing the Order-in-original. Matter remanded to the learned Tribunal to decide the appeal afresh, more particularly, with respect to the CENVAT credit utilized/ availed by the respondent-assessee - appeal allowed by way of remand.

Summary

Issues:
Appeal against the order of Customs, Excise & Service Tax Appellate Tribunal setting aside demand of service tax and CENVAT credit utilization.

Detailed Analysis:

1. Background and Investigation:
The appellant challenged the Tribunal's order allowing the respondent's appeal and setting aside the demand for service tax and CENVAT credit irregularities. The respondent, engaged in construction activities, was found to have not discharged service tax liabilities despite being registered. Various irregularities were uncovered during investigation, including non-declaration of taxable value, failure to remit collected service tax, and incorrect filing of returns.

2. Show-Cause Notice and Adjudication:
A show-cause notice was issued to the respondent demanding service tax and disallowing irregularly availed and wrongly utilized CENVAT credit. The Adjudicating Authority confirmed the service tax demand and disallowed the CENVAT credit, imposing penalties and interest as well.

3. Appeal to Tribunal:
The respondent appealed the Adjudicating Authority's order to the Central Excise & Service Tax Appellate Tribunal, which set aside the order, leading to the present appeal.

4. Supreme Court Judgment:
The Supreme Court noted that the dispute primarily concerned the post-2007 period and the classification of services as Works Contract, making the respondent liable for service tax. The Court observed that the Tribunal failed to adequately address the issue of irregular CENVAT credit utilization, despite specific allegations and findings by the Adjudicating Authority.

5. Decision and Remand:
The Court allowed the appeal, setting aside the Tribunal's order and remanding the matter for fresh consideration. The Tribunal was directed to decide the appeal afresh, particularly focusing on the CENVAT credit issue. The Court emphasized the importance of a detailed examination and directed the Tribunal to pass a fresh order within six months.

6. Conclusion:
The Supreme Court allowed the appeal, directing a fresh consideration by the Tribunal on the issue of CENVAT credit utilization. The Court highlighted the need for a thorough examination of the matter and set a timeline for the Tribunal to complete the process. No costs were awarded in the case.

This detailed analysis highlights the legal proceedings, findings, and directions provided by the Supreme Court in the judgment concerning the appeal related to service tax demand and CENVAT credit irregularities.