Service tax credit verification required on missing bills and timing of availment before remand for fresh decision.

Denial and recovery of service tax credit required fresh examination because the key factual issues were not verified on merits. The appellate authority had treated the lapse as merely technical, but 67 bills on which credit was claimed were never produced for verification. The timing of credit on 14 bills also needed examination to determine whether credit was taken before payment of tax on the input service, which would affect admissibility under the credit rule. The appellate order was vacated and the matter was remanded to the Commissioner (Appeals) for a reasoned decision after verification of these unresolved issues.

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Issues: Whether the denial and recovery of service tax credit required fresh examination in view of the non-production of 67 bills and the disputed timing of credit taken on 14 bills.

Analysis: The Order-in-Appeal had set aside the original demand on the footing that the lapse was merely technical, without examining the material fact that 67 bills on which credit had been taken were never produced for verification. The dispute regarding 14 bills also required verification as to whether credit had been taken before payment of tax on the input service, which would attract the rule governing availment of credit. Since these questions were not examined on merits, the matter required a reasoned reconsideration.

Conclusion: The matter was remanded to the Commissioner (Appeals) for fresh decision after verification of the 67 bills and the timing of credit on the 14 bills.

Final Conclusion: The appellate order setting aside the original demand was vacated and the dispute was sent back for reconsideration on the unresolved factual and legal issues.

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