2019 (10) TMI 817 - AT - Service Tax

Appellant's Cenvat credit dispute: Tribunal remands for service tax verification.

M/s Kunj Power Projects (P) Ltd., Shri Abhay Kumar Saxena, Director, Shri Sandeep Chaturvedi, Director Versus Commissioner of Central Excise & Service Tax

The appellant, engaged in fabrication and installation services, availed cenvat credit from a service provider. Allegations of fake invoices led to denial ... CENVAT credit - duty paying invoices - fake/bogus invoices - service tax duly deposited - HELD THAT:- The assessee is entitled to the Cenvat Credit of duty ‘Paid’ by the input service provider and if the input service provider has actually deposited the Service Tax, the same would be available as a credit to the service recipient. Revenue has disputed the fact of payment of service tax by M/s STPL on the ground that they were not found to be in existence at the time of investigations conducted by the Revenue. Inasmuch as in the miscellaneous application the appellant has produced evidences for deposit of service tax by M/s STPL, we are of the view that the said fact requires verification at the end of the Adjudicating Authority - matter remanded to the Original Adjudicating Authority for de-novo decision. Appeal allowed by way of remand. Issues:1. Availment of cenvat credit based on invoices from a service provider.2. Allegations of fake and bogus invoices leading to denial of credit, interests, and penalty.3. Filing of miscellaneous application for additional evidence and retraction of statements.4. Dispute over payment of service tax by the service provider.5. Remand for verification of service tax payment and admissibility of credit.Analysis:The case involves the appellant, engaged in fabrication, erection, and installation of power sub-stations, availing cenvat credit of Rs. 1,15,27,245/- for input services from M/s Sakshi Trade Link Pvt. Ltd. (STPL). The Revenue alleged that STPL did not provide services, leading to the appellant availing credit based on fake invoices. Consequently, proceedings were initiated resulting in the Commissioner's order confirming the demand, denying credit, imposing interests, and penalty.The appellant filed a miscellaneous application presenting additional evidence, including a retraction statement from Shri Sumit Sharma of STPL, stating his directorship post-appointment date, and a certificate from another director confirming service provision. Additionally, a bank statement showing service tax deposits by STPL was submitted. The Tribunal noted the entitlement of cenvat credit if the service provider paid service tax, which the Revenue disputed, citing non-existence during investigations and relying on un-cross-examined statements.Considering the evidence of service tax deposits by STPL presented in the miscellaneous application, the Tribunal remanded the matter to the Adjudicating Authority for verification. The Tribunal refrained from expressing an opinion on the retracted statements but emphasized that if STPL indeed paid service tax without Revenue objections, the credit would be admissible to the appellant. The Tribunal allowed the appellant to raise all issues, including cross-examination requests, during the remand process.The Tribunal clarified that detailed arguments were not addressed due to the remand, granting the appellant the liberty to present alternative arguments and request cross-examination before the Adjudicating Authority. Ultimately, all appeals were allowed by way of remand, with the order pronounced in open court on 16.05.2019.