Tax Tribunal: Adjustments allowed for service tax, interest upheld, cenvat credit partially overturned.

The Tribunal allowed adjustments for excess and short payments of service tax, remanding for verification of net tax payable. The demand for interest on delayed payments was upheld as uncontested. The denial of cenvat credit was partially overturned, emphasizing the need for a fresh decision considering principles of natural justice and limiting consideration to issues raised in the notice. The matter was remanded for a new decision, ensuring fairness and adherence to legal principles.

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Issues:
1. Short payment of service tax under banking and financial services and business auxiliary services.
2. Demand for payment of interest for delayed service tax payment.
3. Alleged irregular availment of cenvat credit.

Short Payment of Service Tax:
The appellant, engaged in banking and financial services, faced allegations of short payment of service tax during specific periods. The Commissioner confirmed the demand for service tax and interest in the original order, which was later modified in a subsequent order. The appellant argued that excess payments in some months were adjusted against short payments in others, resulting in no net short payment. Citing relevant case laws, the appellant contended that such adjustments were permissible even before the introduction of Rule 6(4A) of the Service Tax Rules, 1994. The Tribunal, considering the appellant's submissions and case laws, held that excess and short paid amounts could be adjusted, remanding the matter for verification of net service tax payable.

Demand for Payment of Interest:
The appellant did not contest the demand for interest on delayed service tax payments. The Tribunal upheld the demand for interest, as the appellant did not dispute this aspect.

Irregular Availment of Cenvat Credit:
Regarding the alleged irregular availment of cenvat credit, the appellant argued that they possessed relevant invoices but faced challenges in producing them due to the dispersed nature of documents across branches. The adjudicating authority, however, disallowed a part of the credit beyond the show cause notice's scope. The Tribunal noted that similar credits were allowed for subsequent periods by the Tribunal in a previous order. Referring to relevant case laws and court decisions, the Tribunal concluded that denial of credit for disputed services, which were used in relation to the business, was not justified. The matter was remanded to the adjudicating authority for a fresh decision, emphasizing adherence to principles of natural justice and restricting consideration to issues raised in the show cause notice.

In conclusion, the Tribunal set aside the impugned orders and remanded the matter to the adjudicating authority for a denovo decision. The Tribunal's decision, pronounced on 15.06.2017, addressed the issues of short payment of service tax, demand for interest payment, and irregular availment of cenvat credit comprehensively, ensuring a fair and just resolution based on legal principles and precedents.

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