2015 (9) TMI 46 - AT - Service Tax

Appeal overturns denial of Cenvat credit, emphasizing fair adjudication principles.

Amogh Broadband Services Pvt Ltd Versus Commissioner of Central Excise, Bangalore-I

Amogh Broadband Services Pvt Ltd Versus Commissioner of Central Excise, Bangalore-I - TMI Issues:1. Denial of Cenvat credit based on ineligible documents.2. Reduction of demand by the adjudicating authority.3. Lack of disclosure of the jurisdictional Central Excise officer's report to the assessee.4. Violation of principles of fair adjudication and natural justice.Analysis:1. The judgment addresses the denial of Cenvat credit amounting to Rupees 4,70,52,747/- by the Commissioner due to the utilization of ineligible documents. Out of this amount, Rupees 4,13,07,101/- was used for service tax payment, which was confirmed against the assessee. Additionally, a demand of Rupees 13,92,482/- under specific services was also confirmed, of which the appellant had paid a portion along with interest.2. Initially, a demand of approximately Rupees 10.75 Crores was raised against the appellant for deficiencies in cenvatable invoices. Following a report from the jurisdictional Central Excise Superintendent, the adjudicating authority reduced the demand to Rupees 4.70 Crores. This reduction was based on the report submitted by the Superintendent after document verification.3. The judgment highlights a critical procedural flaw where the report of the jurisdictional Central Excise officer was not shared with the assessee for their comments. The lack of disclosure impeded the appellant from contesting the grounds for document ineligibility. The absence of providing such crucial material to the appellant violated the principles of fair adjudication, requiring the adjudicating authority to furnish relevant materials to the concerned party for a fair defense.4. Due to the failure to provide the report to the appellant and allow them to respond, the judgment sets aside the impugned order and remands the matter to the Commissioner for a fresh decision. The Commissioner is directed to provide a copy of the Superintendent's report to the appellant and grant them a reasonable opportunity to present their case. Emphasis is placed on upholding the principles of natural justice in the new proceedings to ensure a fair and just determination. The stay petition and appeal are disposed of accordingly, with the assurance of observing natural justice principles in the future proceedings.