Appeal Remanded for Tax Liability Verification on Mobilisation Advances and CENVAT Credit

The appellant, involved in works contract services, challenged the levy of service tax on mobilisation advances and irregular availment of CENVAT credit. The matter was remanded for verification of tax liability on mobilisation advances and CENVAT credit reversal. The appellant's submissions were considered, and the appeal was remanded for further verification, allowing the appellant to present supporting documents for redetermination of tax liability. The judgment disposed of the appeal by remanding it to the original authority for review.

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Issues involved:
1. Non-payment of service tax on mobilisation advance
2. Irregular availment of CENVAT credit on common input services

Analysis:
1. The appellant, engaged in works contract services, was issued a show-cause notice for non-payment of service tax on mobilisation advance and irregular availment of CENVAT credit. The lower authority confirmed the demand and imposed penalties, which were upheld with modifications by the first appellate authority. The appellant challenged the levy of service tax on mobilisation advances, stating they had discharged the total liability. The department contended otherwise, demanding tax on unadjusted amounts. Regarding CENVAT credit, the appellant claimed compliance with Rule 6(2) by proportionately reversing CENVAT Credit on common input services. The matter was remanded for verification of the tax liability on mobilisation advances and CENVAT credit reversal.

2. The appellant submitted a Chartered Accountant's certificate showing the total discharge of service tax liability on mobilisation advances. Concerning CENVAT credit, the appellant reversed an amount but failed to provide detailed calculations. The order-in-original noted the appellant's reversal of an amount certified by a Chartered Accountant, but the certificate was not submitted. The Commissioner (Appeals) rejected the claim as relevant ST-3 returns were not produced. The appeal was remanded for verification of service tax payment on mobilisation advances and the calculation of CENVAT credit reversal, allowing the appellant to present supporting documents for redetermination of tax liability. The judgment was pronounced and dictated in open court, disposing of the appeal by way of remand to the original authority.

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