Cenvat credit cannot be denied solely for ST-3 non-disclosure; factual verification of availability and adjustment remains necessary.

Bona fide Cenvat credit, if otherwise available and properly recorded in the assessee's accounts, cannot be denied merely because it was not shown in the ST-3 return. Non-disclosure in the return is treated as a procedural lapse and does not, by itself, defeat adjustment of credit against service tax liability. However, the factual position regarding actual availability, utilisation, carry forward, and any transit of credit must still be verified from the books of account, income tax returns, and connected records. The matter was remanded for fresh adjudication and verification of the credit claim.

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Issues: Whether the Cenvat credit claimed to have been adjusted against the service tax liability could be denied merely because it was not reflected in the ST-3 returns, and whether the matter required fresh verification of the books of account and returns.

Analysis: The liability itself was not disputed, and the record indicated that part of the tax had already been paid through challans before audit detection. The decisive question was whether the assessee had sufficient credit and had validly adjusted it in its accounts. The absence of reflection in the ST-3 returns was treated as a procedural lapse which, by itself, would not defeat otherwise available and bona fide credit. At the same time, the factual position regarding actual availability, utilization, and possible carry forward or transiting of credit required verification from the books of account, income tax returns, and other relevant records.

Conclusion: Non-mention of the credit in the ST-3 returns did not, by itself, bar adjustment of the credit towards the outstanding liability. The matter was remanded for fresh adjudication and verification of the credit claim.

Ratio Decidendi: Bona fide Cenvat credit, if otherwise available and duly recorded in the accounts, cannot be denied merely for non-disclosure in the ST-3 return, though its factual availability and adjustment may require verification.

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