2013 (11) TMI 351 - AT - Service Tax

Appellants' Cooperation & Document Verification Emphasized in Tax Dispute

M/s BHARAT SANCHAR NIGAM LTD Versus COMMISSIONER OF CENTRAL EXCISE

The Tribunal found that the appellants failed to cooperate and demonstrate proper availing of CENVAT credit and correctness of service tax payment. The ... Validity of CENVAT credit – duty paid documents - Whether the appellants have availed CENVAT credit properly or not and whether service tax was paid by including all the elements which are required to be included for demand of service tax – Held that:- There is cooperation from the department whereas there is total non-cooperation from the appellant - the documents which according to the appellant are available have not been verified and appellants have not produced the same before the original adjudicating authority or before the Tribunal because of huge volume has to be considered and the matter has to be remanded to the original adjudicating authority for the purpose of verification as to whether documents on the basis of which CENVAT credit has been taken are available and credit taken is correct. It is justifiable that the matter has to be remanded to the original adjudicating authority – but taking into account the attitude of the appellants, it is impossible to remand the matter without putting them to terms - the appellant is directed to deposit another amount of Rs.50,00,000 and report compliance to the original adjudicating authority who shall after noting compliance, get the documents verified and proceed for fresh adjudication – stay granted partly. Issues involved:1. Proper availing of CENVAT credit by the appellants.2. Payment of service tax including all required elements for demand.Analysis:The central issue in this case revolves around the proper availing of CENVAT credit by the appellants and the correctness of the service tax payment. The contention put forth by the assessee was that they provided a detailed report during adjudication, which the Commissioner allegedly did not consider. The documents were available for verification, but the verification did not take place. The Tribunal directed the appellant to produce a worksheet demonstrating the calculation of the payable amount and the correctness of the payment made in comparison to the demand raised by the Revenue. However, the appellant failed to provide the worksheet even after a significant period. This lack of cooperation and respect for the law displayed by the appellants was noted by the Tribunal.On the other hand, the department promptly verified the claim made by the appellant regarding a duplication of demand related to disallowed CENVAT credit. The department confirmed the duplication, showcasing their cooperation. However, the documents claimed to be available by the appellant were not verified, and they were instructed to produce these documents before the original adjudicating authority for proper verification. The Tribunal emphasized the importance of verifying the documents on which the CENVAT credit was based and the correctness of the credit taken. Due to the large volume of documents involved, the matter was to be remanded to the original adjudicating authority for thorough verification by a team of officers at the appellant's premises.Considering the appellants' attitude of non-cooperation and the fact that they had already deposited a certain amount, the Tribunal directed them to deposit an additional sum within a specified timeframe. Failure to produce the required documents during the verification process would empower the Commissioner to adjudicate the matter based on available records and submissions. The appellants were assured of a reasonable opportunity to present their case during the fresh adjudication process. The Tribunal emphasized the necessity of compliance and proper verification to ensure a fair resolution of the case.