2020 (3) TMI 742 - AT - Service Tax

Appellate tribunal remands case for fair hearing after denial of cenvat credit without verification report.

Punjab National Bank Versus Commissioner, Central Goods and Service Tax, Customs & Central Excise

The appellate tribunal allowed the appeal by remanding the case back to the adjudicating authority due to the denial of cenvat credit without providing ... CENVAT Credit - rejection of cenvat credit by the Court on the observation relying on the verification report of the jurisdictional Range Officer - Section 142(9) of the CGST Act read with the provisions of Cenvat Credit Rules, 2004 - HELD THAT:- No such report/copy was provided to the appellant, neither any opportunity provided to inspect the report and offer their comments. In this view of the matter, it is miscarriage of justice by denying adequate opportunity of hearing to the appellant. Accordingly, this appeal is allowed by way of remand to the adjudicating authority. Appeal allowed by way of remand. Issues:1. Denial of cenvat credit claimed by the appellant in the revised ST-3 return.2. Rejection of refund under Section 142(9) of the CGST Act and Cenvat Credit Rules, 2004.3. Violation of provisions of Cenvat Credit Rules, 2004 and Central Excise Act.4. Failure to establish entitlement to cenvat credit and produce necessary documents.5. Denial of adequate opportunity of hearing to the appellant.Analysis:1. The primary issue in this appeal was whether the cenvat credit claimed by the appellant in the revised ST-3 return was rightfully denied. The appellant, a banking company, initially showed a cenvat credit of &8377; 5,34,059/- in their ST-3 return for a specific period. Subsequently, they revised the return to reflect a higher cenvat credit of &8377; 10,51,663/-. The dispute arose when they sought a refund for the balance amount under the transitional provisions of the CGST Act, which was objected to by the Revenue due to certain invoices being barred by limitation. The appellant then curtailed their refund claim to &8377; 4,68,476.80.2. The rejection of the refund claim was based on a show cause notice issued by the Revenue, citing violations of the Cenvat Credit Rules, 2004. The Assistant Commissioner rejected the refund, highlighting that certain invoices were issued more than a year before claiming cenvat credit, violating Rules 4(1) and (7) of the Cenvat Credit Rules, 2004. Additionally, it was noted that the appellant filed the refund claim without proper provisions in the existing law, leading to the rejection under Section 11-B of the Central Excise Act, 1944.3. The Commissioner (Appeals) acknowledged the entitlement to cenvat credit under Section 142 of the CGST Act but emphasized the need to establish such entitlement in accordance with the Cenvat Credit Rules, 2004. The appellant's failure to submit necessary duty paying documents for verification at both the adjudication and appellate stages resulted in the rejection of the appeal.4. The appellate tribunal found that the denial of cenvat credit was based on a verification report of the jurisdictional Range Officer, which was not provided to the appellant, depriving them of an opportunity to respond. This lack of adequate hearing was deemed a miscarriage of justice, leading to the allowance of the appeal by way of remand to the adjudicating authority.5. The tribunal directed the adjudicating authority to provide the appellant with the verification report, allow them an opportunity to be heard, and examine the documents to determine the eligibility of cenvat credit. If found eligible, the refund was to be granted within thirty days along with any applicable interest. The appellant was instructed to appear before the Adjudicating Authority with a copy of the tribunal's order to seek a proper hearing.