Case Law Details
Shriram Rayons Vs Commissioner (CESTAT Delhi)
The appellant, engaged in providing taxable services including renting of immovable property, goods transport agency service, business auxiliary service, maintenance or repair service, and scientific and technical consultancy service, challenged the order of the Commissioner (Appeals) confirming a CENVAT credit demand of ₹5,26,497.
During audit of the appellant’s records, it was observed that CENVAT credit of ₹25,25,165 had been availed in the ST-3 return for June 2017. Out of this, documentary evidence required under Rule 9(1) of the Cenvat Credit Rules, 2004 was stated to be unavailable for credit amounting to ₹18,09,098. Show Cause Notice No. 8092 dated 01.10.2019 proposed reversal of the credit on the ground that it had been availed prior to payment of service tax. The proposal was confirmed through Order-in-Original No. 69/2020 dated 01.07.2020.
In appeal, the Commissioner (Appeals) extended the benefit of CBEC Circular No. 207/05/2017 dated 28.09.2017 and dropped the demand of ₹12,82,601. However, the balance demand of ₹5,26,497 was upheld on the ground that copies of Challan Nos. 28067 dated 06.07.2017, 29936 dated 06.07.2017 and 4079 dated 21.07.2017, relating to the disputed CENVAT credit, were not available.
Before the Tribunal, the appellant submitted that all requisite documents had been produced before both adjudicating authorities. It was argued that the audit report contained challan numbers different from those mentioned in the show cause notice and that the challan numbers appearing in both adjudication orders had been reproduced from the show cause notice. The appellant further submitted that the relevant challans were already on record, the credit availed was proportionate and lower than the amount reflected in the challans, and that the Service Tax register containing the compilation of challans corroborated the documents produced. It was also contended that the authorities had failed to appreciate the typographical error in the challan numbers contained in the show cause notice and had not properly correlated the entries in the Service Tax register with the challans. On this basis, the appellant requested that the matter be remanded for proper appreciation of the documents and recalculation.
The Department submitted that the Commissioner (Appeals) had already granted the benefit of the CBEC Circular dated 28.09.2017 and had thoroughly examined the documents before confirming the partial demand due to non-availability of the relevant documents. However, the Department expressed no objection to remanding the matter.
The Tribunal observed that the original adjudicating authority had confirmed reversal of the entire CENVAT credit of ₹18,09,098 solely on the ground that the appellant had failed to produce documentary evidence establishing that the services had been received before 01.07.2017. It further noted that the Commissioner (Appeals) had confirmed the remaining demand of ₹5,26,497 on the basis of non-availability of the requisite documents.
Taking note of the appellant’s submission that the relevant documents had already been placed on record, along with the contention regarding typographical errors in the challan numbers and correlation with the compiled records maintained by the appellant, the Tribunal accepted the request for remand.
The matter was remanded to the Commissioner (Appeals) with directions to examine the challans, consider the documents produced by the appellant, verify whether any typographical error existed in the challan numbers, and thereafter pass a fresh decision independently, without being influenced by any observations contained in the Tribunal’s order.
Accordingly, the appeal was allowed by way of remand.
FULL TEXT OF THE CESTAT DELHI ORDER
The appellant in the present case is engaged in providing taxable services relating to ‘Renting immovable of property’, ‘Transport of goods transport agency service’, ‘Business auxiliary services’,‘Maintenance or repair services’ and ‘Scientific and technical consultancy service’. During the course of audit of appellants record, it was observed that appellant has availed Cenvat Credit in ST 3 return of June, 2017 to the extent of Rs.25,25,165/- out of which for the amount of Rs.18,09,098/- no documentary evidence were available with the appellant as was required under Rule 9(1) of Cenvat Credit Rules, 2004. Accordingly, while issuing show cause notice No. 8092 dated 01.10.2019, the Cenvat credit for the said amount was proposed to be reversed for the reason that the same was availed prior to making payment of service tax. The said proposal was initially confirmed vide Order-in-Original No. 69/2020 dated 01.07.2020. The appeal thereof was partially been allowed giving the benefit of CBEC Circular No. 207/05/2017 dated 28.9.2017 and the demand of Rs. 12,82,601/-has already been dropped by Commissioner (Appeals). However, the demand of Rs.5,26,497/- has still been confirmed for want of requisite documents i.e. copy of challan No. 28067 dated 06.07.2017, 29936 dated 06.07.2017 and 4079 dated 21.07.2017 involving Cenvat credit availed Rs. 5,26,497/-.
2. The present appeal has been filed to assail the said order confirming the partial demand.
3. I have heard Shri S C Kamra and Shri Dubey learned Counsels for the appellant and learned Authorised Representative Ms Tamana Alam, for the Department.
4. Learned Counsel has submitted that all requisite documents were produced before both the Adjudicating Authorities. It is mentioned that in fact the audit report mentions different challan numbers in the table and said reports whereas the show cause notice has different challan number than the challan number mentioned in Audit Report. It is from the show cause notice only that the numbers have been taken in both the orders of both the Adjudicating Authorities. Learned Counsel further impressed upon that the requisite documents have been furnished as the challans they possess were very much placed on record. It has also been impressed upon that the credit availed was proportionate and was of lesser the amount than mentioned in the challan. Learned Counsel laid emphasis upon the compilation of challans as was maintained in the appellants’ Service Tax register. It is mentioned that the Adjudicating Authority below has failed to appreciate the typing error as has been committed in the show cause notice with respect to challan numbers and also failed to revise the respective amounts mentioned in the Service Tax register which dully corroborates the challan produced by the appellant even before the Adjudicating authority. With these submissions, learned Counsel has requested for remanding the matter back for proper appreciation of the documents and proper calculation in view thereof.
5. Learned Departmental Representative has mentioned that the Commissioner (Appeals) has meticulously considered the CBEC Circular dated 28.9.2017 and due benefit has already been given. The documents submitted were thoroughly examined by Commissioner (Appeals) and it is thereafter that the partial demand was still been confirmed due tonon- availability of the respective documents thereof. However, learned Departmental Representative has expressed no objection in remanding the matter back.
6. In view of the submissions and perusing the record, it is observed that the Original Adjudicating Authority has confirmed the entire demand / reversal of Cenvat Credit of Rs.18,09,098/-for the sole reason that the appellant has failed to produce any documentary evidence by which it can be established that the service have been received before 1.7.2017. Commissioner (Appeals) also while confirming the demand of Rs. 5,26,497/-has held the non-availability of the requisite documents as the reason for the same. However, keeping in view that the documents are impressed upon to have been annexed on record and to have been provided to both the Original Adjudicating Authorities. The typographic error in challan number and co-relation of the compiled record of the appellant is impressed upon by the learned Counsel. Keeping in view the same, the request of remanding the matter is hereby accepted. The matter is remanded back to the Commissioner (Appeals) to appreciate both the challans and to look into the documents produced by the appellant and to appreciate as to whether there is any typographic error. It is thereafter to pass the fresh decision without being affected by any findings in this order.
7. Appeal is allowed by way of remand.
(Dictated and pronounced in the open Court)
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