2008 (9) TMI 294 - AT - Service Tax

Appellate tribunal remands service tax credit case due to verification discrepancies

The appellate tribunal remanded the case back to the Commissioner (Appeals) after finding that the respondent had incorrectly availed service tax credit ... Cenvat Credit – wrong availment of credit on bills / invoices - the Commissioner (Appeals) has simply set aside the Order of the original authority on the ground that the lapse committed on the part of the respondent was merely technical in nature without looking into the fact that the respondent had not even produced the 67 bills on the basis of which the credit has been taken and this fact has not been denied by the respondent - In respect of 14 bills, it is his contention that the credit was taken only after payment is made, which fact needs verification by the Commissioner (Appeals). Since the Commissioner (Appeals) has not gone into this issue at all, the matter is remanded back to the Commissioner (Appeals) with a direction to look into the claim of revenue as admitted by the respondent also that the 67 bills involving amount of Rs. 80,892 were never produced by them nor are available with them. Issues:- Incorrect availment of service tax credit by the respondent.- Disallowance of service tax credit by the original adjudicating authority.- Appeal by the respondent against the order.- Contention of the revenue regarding bills verification and credit utilization.- Submission by the consultant on behalf of the respondent.- Consideration of submissions by the appellate tribunal.- Remand of the matter back to the Commissioner (Appeals).Analysis:1. The case involved the respondent, an advertising firm, incorrectly availing service tax credit, leading to a show-cause notice by the revenue. The original adjudicating authority disallowed the credit and imposed penalties. The respondent appealed to the Commissioner (Appeals), who allowed the credit, citing a technical lapse. The revenue challenged this decision.2. The revenue contended that the respondent failed to produce all bills for verification, with discrepancies in credit utilization. Specifically, credit was taken before payment for some bills, contrary to rules. The revenue sought recovery of the unverified credit amounts.3. The consultant for the respondent argued that a portion of the credit remained unutilized and denied taking credit before payment for certain bills. The respondent aimed to justify their actions regarding bill verification and credit utilization.4. The appellate tribunal found that the Commissioner (Appeals) overlooked the crucial aspect of unproduced bills by the respondent and the timing of credit utilization. The matter was remanded to the Commissioner (Appeals) for a thorough examination of these issues and a reasoned decision.5. Ultimately, the Commissioner (Appeals)'s decision was set aside, and the revenue's appeal was allowed for further review. The appellate tribunal kept all issues open for reconsideration, emphasizing the importance of verifying bills and the timing of credit utilization in the case.