Availing service tax paid after huge delay.

[MANDAVILLI RAMAKRISHNA]

One of our client did man power supply up to 31.03.2012 on sub contract basis and not collected service tax and not shown those receipts in ST returns and paid taxes on the balance turnover only.

Now dept. gave notice stating as MIS DECLARED or SHORT SHOWN receipts and the adjudication shall be complete in this week.

Now his main contractor asked to submit invoices for release of service tax. Can the main contractor eligible to get input on the ST now proposed to be paid in the back drop of the mistake of the sub contractor???

What are the implications in this case and how to proceed further. Dept. going to conclude before payment of the tax, by issuing adjudication orders with penalty.

AI Summary

Input tax credit eligibility: main contractor may claim CENVAT on supplementary invoice unless fraud or collusion is proven.
Rule 9 allows CENVAT credit on the basis of a supplementary invoice or a challan evidencing payment of service tax, but credit is precluded where the additional liability results from fraud, collusion, willful misstatement or suppression of facts; pending inquiries, show-cause notices and confirmed penalties critically affect eligibility, while proof of bona fide belief together with documentary evidence may permit reimbursement and a subsequent credit claim.