TaxTMI 
TaxTMI 
2014 (10) TMI 773
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....e bank is also paying taxes as a recipient of service in respect of the services notified for the purpose. 2.2 The bank has obtained centralized registration in respect of all its branches and offices situated across the country. The information is collected from the branches and offices and the taxes are paid accordingly. During the course of audit, it was observed that the bank had utilised the CENVAT credit in excess of 20% for payment of output tax. Further, it was observed that bank has wrongly classified certain services as the services falling u/r 6(5) of the CCR and thereby availing credit of 100% of the same. The period involved in respect of this issue is October 2005 to March 2008. Further, it has also been alleged that there was short payment u/r 6(3)(ii) of the CCR on account of alleged wrong classification of the services u/r 6(5). The period involved in respect of this issue is April 2008 to March 2010. Extended period has also been invoked by alleging willful suppression of fact with intend to evade tax. 2.3 The related show-cause notice was issued purely based on the observations of the audit team. The appellant gave a detailed reply and also appeared in pers....
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....n the conclusion that appellants had utilized more than 20% of CENVAT credit. Two periods were examined by us and in both the cases, we found that the amount of credit utilized by the appellants come to exactly 20%, if the claim of the appellant for method of calculation is accepted. The details are as under: M.R.V. Krishna & Co. Chartered Accountants Date : 20.02.2013 TO WHOMSOEVER IT MAY CONCERN We have examined the internal records of M/s. Canada Bank having its Head Office at No. 112, JC Road, Bangalore - 560 002 for the period April 2005 to September 2006. Month Actual Service Tax Liability CENVAT Credit utilized Balance payable Cash Paid CENVAT Credit Opening Balance Paid during the month Total paid Adjusted towards liability Adjusted Excess payment carried over Opening Balance Actual credit Availed utilised in respect of Rule 6(5) items utilised in respect of other items Total utilised Closing Balance (1) (2) (3)=(14) (4)=(2-3) (5) (6) (7)=(5+6) (8)=(4) (9)=(7-8) (10) (11) (12) (13) (14)=(12+13) (15)=(10+11-14) Oct'05 ....
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.... 503 4 75 98 475 94 39 489 5 24 60 940 6 19 00 429 4 75 98 475 1 43 01 954 75 82 503 2 23 472 73 59 031 75 82 503 13.74% Sep'06 7 54 80 277 62 77 383 6 92 02 894 1 43 01 954 5 75 27 268 7 18 29 222 6 92 02 894 26 26 328 62 77 383 2 56 421 60 20 962 62 77 383 8.32% 36 27 37 566 5 36 68 610 30 99 73 133 34 97 75 399 30 90 68 956 5 36 68 610 16 36 295 5 20 32 315 5 36 68 610 We have verified the above statements with the Service Tax Return (ST 3) returns filed by the bank. We hereby certify that the Service Tax liability (co. no. 2), the cash paid during the month (Col no. 6), CENVAT credit Availed (Col no. 11) and the opening balance of Rs. 1,00,09,844/- (Col No. 5) in Oct 2005 month shown in the above statement are correct as per ST3 returns filed by the bank for the half years Mar 2006 & Sept 2006. For MRV KRISHNA & CO Chartered Accountants (R.K. SENTHIL KUMAR) Partner M No. 029870 Firm Regn No.: 0016425 3....
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....he same line. From the certificates and the submissions before the original authority, we find that the appellants did not make a clear claim that they had selected invoices randomly and on the basis of these certificates, all the credit taken in respect of common input services have to be treated as correct and the invoices have to be considered as ones relating to services classifiable under services listed in Rule 6(5) of CENVAT Credit Rules, 2004. In such a situation, the observation of the Commissioner that the appellants are eligible only to this extent cannot be faulted with. At the same time, we also have to take note of the fact that the audit observation was based on 1% of the samples and there is no clear finding that these are not common input services. Instead it appears that Department is attempting reclassification of the input services to arrive at this conclusion. 4. Even though we could have remanded the matter back so that the invoices could be verified once again and the appellant is required to produce a proper CA certificate on the basis of random sampling, it would have resulted in further litigation, further adjudication process and additional work for bo....