2024 (2) TMI 562 - AT - Central Excise

Recovery of short paid service tax alongwith interest and penalty - Maintenance or Repair Service and Erection, Commissioning Installation Services - wrong availment of abatement under the category of Erection, Commissioning and Installation Services and Construction Services in respect of Commercial or Industrial Buildings and Civil Structures - wrong availment of Cenvat credit on improper invoices which were not addressed to their registered account - penalty. Short payment of service tax under the head of Maintenance or Repair Service and Erection, Commissioning Installation Services - HELD THAT - The issue involved in the present case is only vis- -vis production of the documents showing the receipt/non-receipt of the amount against which the demand of Rs.4,44,939/- has been made - the said documents also not found to be available in the appeal file - one opportunity granted to the appellant to produce all these documents before the Original Authority for consideration and if satisfied that any part of the amount against which service tax has been demand, have not been received by the appellant to allow him the benefit of the same - matter on remand. Short payment of service tax to the tune of Rs.1,20,094/- by way of wrong availment of abatement under the category of Erection, Commissioning and Installation Services and Construction Services in respect of Commercial or Industrial Buildings and Civil Structures - HELD THAT - As the appellant failed to establish that claim for exemption under the notification no 1/2006-ST, the demand made by denying abatement for determination of taxable value for the levy of service cannot be faulted with - demand upheld. Short payment of service tax to the tune of Rs.69,864/- by way of wrong availment of Cenvat credit on improper invoices which were not addressed to their registered account - HELD THAT - The issue in this regard is no longer res integra and the Tribunal/Courts have decided that for claiming the benefit of input services, it is not necessary that invoices be addressed to the registered premises of the appellant - reliance can be placed in mPortal India Wireless Solutions P. Ltd. 2011 (9) TMI 450 - KARNATAKA HIGH COURT - there are no merits in the impugned order seeking to deny the Cenvat credit on this ground. Penalty - HELD THAT - Penalties imposed on the appellant need to be re-determined by the Original Authority on the basis of his findings on the issues for which the matter is remanded back to the Original Authority. Appeal is partly allowed - part matter on remand.

Issues Involved:
1. Demand of Service Tax based on reconciliation of income.
2. Eligibility for abatement under Notification No.01/2006-ST.
3. Denial of Cenvat credit due to improper invoices.

Issue 1: Demand of Service Tax based on reconciliation of income
The appellant was alleged to have short paid service tax amounting to Rs.4,44,939/- under the heads of Maintenance or Repair Service and Erection, Commissioning & Installation Services. The demand was made based on the reconciliation of ST-3 returns with the income shown in the profit and loss account. The appellant contended that the amounts in question were never received from their clients and were shown as bad debts. The Tribunal observed that the value of taxable service should be determined as per Section 67 of the Finance Act, 1994, and actual amounts received should be the basis of the demand. The Tribunal remanded the matter back to the Original Authority for consideration of documents showing the receipt/non-receipt of the amount against which the demand was made.

Issue 2: Eligibility for abatement under Notification No.01/2006-ST
The appellant claimed eligibility for abatement of 67% under the said notification while also availing Cenvat credit on input services. The Tribunal noted that the exemption notification clearly stated that abatement was not available if Cenvat credit on inputs, capital goods, or input services was availed. The appellant failed to produce evidence to show that they did not avail Cenvat credit for the services in question. The Tribunal upheld the denial of abatement and confirmed the demand of Rs.1,20,094/-.

Issue 3: Denial of Cenvat credit due to improper invoices
The credit of Rs.69,864/- was denied on the ground that the invoices were not addressed to the registered premises of the appellant. The Tribunal found that the issue was settled by various decisions, which held that invoices need not be addressed to the registered premises for claiming Cenvat credit. The Tribunal cited decisions such as Manipal Advertising Services Pvt. Ltd., mPortal India Wireless Solutions P. Ltd., and others. Consequently, the Tribunal dropped the demand for denial of Cenvat credit on this ground.

Penalties
The penalties imposed on the appellant were to be re-determined by the Original Authority based on the findings on the remanded issues.

Conclusion
1. The issue of demand of service tax based on reconciliation is remanded back for reconsideration.
2. The demand of service tax by denying the benefit of abatement is confirmed.
3. The demand for denial of Cenvat credit due to improper invoices is dropped.
4. The appeal is partly allowed, and penalties are to be re-determined.

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