Show cause notice limits, input service credit, and extended limitation all failed where records supported the assessee.

Adjudication cannot travel beyond the scope of the show cause notice: where the notice referred to Rule 6(4) but the finding rested on Rule 6(4A), the revised invoice value demand was treated as unsustainable. CENVAT credit on rent and telephone services was recognised as input service credit because the services supported output services and the records, invoices and supporting certifications were adequate; mere omission of the recipient name on the invoice did not by itself defeat credit. The extended limitation period was also found unavailable because the relevant receipts were disclosed in returns and no suppression with intent to evade tax was established.

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Issues: (i) whether the demand of Service Tax of Rs. 1,40,397/- for revised invoice value could be sustained when the adjudication travelled beyond the show cause notice; (ii) whether CENVAT credit of Rs. 48,717/- and Rs. 1,77,839/- on input services was admissible; and (iii) whether the extended period of limitation could be invoked on the facts of the case.

Issue (i): whether the demand of Service Tax of Rs. 1,40,397/- for revised invoice value could be sustained when the adjudication travelled beyond the show cause notice

Analysis: The notice alleged violation of Rule 6(4) of the Service Tax Rules, 1994, whereas the appellate finding rested on Rule 6(4A) of the Service Tax Rules, 1994. The revised invoices and certificates from the service receiver and Chartered Accountant supported the case that the original invoice value had been reduced pursuant to negotiations and that tax had been adjusted accordingly. An adjudication beyond the scope of the show cause notice could not be sustained.

Conclusion: The demand of Rs. 1,40,397/- was set aside in favour of the assessee.

Issue (ii): whether CENVAT credit of Rs. 48,717/- and Rs. 1,77,839/- on input services was admissible

Analysis: The credit related to rent and telephone services used for providing output services, which fell within the ambit of input service credit under Rule 2(l) of the CENVAT Credit Rules, 2004. The credit was also supported by records, invoices, ledger entries, bank statements, and Chartered Accountant certification. Mere absence of the recipient name on the invoice, when the material requirements under Rule 9 were otherwise met, did not justify denial of credit. Credit taken after payment to the service provider was permissible under Rule 4(7) of the CENVAT Credit Rules, 2004.

Conclusion: Denial of the CENVAT credit was set aside in favour of the assessee.

Issue (iii): whether the extended period of limitation could be invoked on the facts of the case

Analysis: The show cause notice covered the period from April 2013 to March 2015 and was issued on 30.12.2016. The relevant receipts had been disclosed in the ST-3 returns, records were produced before audit, and no suppression with intent to evade tax was established. A notice founded on audit findings, without a basis for alleging suppression, did not justify invocation of the extended period.

Conclusion: The demand was held to be time barred and the extended period was not invocable in favour of the assessee.

Final Conclusion: The impugned order was unsustainable on merits and on limitation, and the appeal succeeded with consequential relief.

Ratio Decidendi: An adjudication cannot travel beyond the scope of the show cause notice, and denial of CENVAT credit or invocation of the extended period requires a legally sustainable basis supported by the record and by a valid allegation of suppression.

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