Tribunal overturns credit denial due to address issue, citing KYC norms. No intent to evade duty.

The Tribunal ruled in favor of the appellant, overturning the decision to disallow CENVAT credit due to an address discrepancy on the bank account related to input services provided by a bank to a specific unit. The Tribunal found the address issue to be a technical matter arising from KYC norms and not a valid reason to deny the credit. Additionally, the Tribunal agreed with the appellant's argument regarding the limitation period for issuing the Show Cause Notice, stating that there was no intent to evade payment of duty. As a result, the demand, interest, and penalties imposed were set aside, and the appellant's appeal was allowed with consequential reliefs.

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Issues:
1. Disallowance of CENVAT credit for input services provided by a bank to a specific unit.
2. Allegation of incorrect address on the bank account leading to credit disallowance.
3. Legal validity of disallowing credit based on address discrepancy.
4. Applicability of limitation period in issuing Show Cause Notice.

Analysis:
1. The case involved the disallowance of CENVAT credit amounting to Rs. 9,42,035/- for the period from August 2011 to April 2014 due to the appellant availing input service credit provided by a bank to a specific unit, which was not in line with the CENVAT Credit Rules, 2004. The Original Authority confirmed the demand, interest, and imposed penalties, which were upheld by the Commissioner (Appeals), leading to the appeal.

2. The appellant had three manufacturing units with separate bank accounts for different units due to PAN-based KYC norms stipulation of RBI. The address discrepancy arose as the bank account for the Gummidipoondi unit showed the Srikakulam address due to KYC norms. Despite the appellant's explanation and a certificate from the bank confirming the account belonging to the Chennai unit, the credit was expunged based on the address discrepancy, leading to the present dispute.

3. The Tribunal found that the address discrepancy on the bank account was a technical issue arising from KYC norms and should not be a ground for disallowing the credit eligible for service tax paid on input services. The certificate from the bank clearly indicated the account pertained to the Gummidipoondi unit, and the Department should have accepted the explanation provided by the appellant. Thus, the recovery of the disallowed credit was deemed unjustified.

4. The appellant also argued on the ground of limitation, stating that the Show Cause Notice issued after two years from the audit conducted lacked factual basis. The Tribunal agreed that there was no suppression of facts with the intention to evade payment of duty, and the case did not attract the ingredients of Section 11AC of the Central Excise Act, 1944. Consequently, the demand, interest, and penalties imposed were set aside, and the impugned order was overturned, allowing the appeal with consequential reliefs as per law.

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