2018 (12) TMI 343

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....is that respondent department had conducted EA audit-2000 and observed availment of inadmissible credit on service tax paid for availing securities services, Vehicle repair services and mobile phone bills payment of the employees during the period between 2012-13 and 2014-15. Further observation during audit was that the appellant had not paid the entire invoice value and the service tax amount on services provided by various contractors but had retained an amount of Rs. 46,45,585/- from them against which it had availed cenvat credit of Rs. 5,74,194/- in respect of it tax component. Reverse charge service tax liability on security services was also not discharged by the appellant as the service recipient was another discrepancy found durin....

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....point of dispute regarding availment of cenvat credit against payment of value of contractors is of less significance since the same is not inadmissible credit but pertains to time gap between such payment vis-a-vis availment of such credits. In referring to judicial decision reported in 2014 (34) STR 440 (T-Del.) in the case of CCE vs. Hindustan Zinc where a clear finding was given that even the full payment from the service recipient has not been received and part payment has been due, he pointed out that Rule 4(7) of Cenvat Credit Rules would not be applicable to the appellant's case. He pointed out that there was no fraud, collusion or misstatement that could speak about guilty mind or mensrea on the part of the appellant as all of its ....

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.... speak about its ill intention for which no interference by the Tribunal is called for in the order passed by the Commissioner (Appeals). He placed reliance on the judgement of JSW Ltd. in Civil Appeal no. 8738-8739/2013 of the Hon'ble Supreme Court on whose observation Commissioner (Appeals) had confirmed the order-in-original. 5. Heard from both the sides at length and perused the case records with reference to judicial decisions on which reliance has been placed. Admittedly there is no mechanism available for determination of admissibility of cenvat credit in the self assessment era for which EA audit 2000 procedure has assumed its importance. 6. Now coming to the statutory audit procedure, the purpose of audit, as available in the....

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..... It may further be noted that audit is a process which is carried on upwards from the last financial year audited till the last completed financial year preceding the date of audit which is contrary to the provision of Section 73(1) whereby if any fraud collusion, misstatement or suppression is noticed by the department, while processing a return or investigating a firm, the respondent department can go up to five years and serve show-cause to justify tax liability. In the instant case, show-cause was issued on 03.02.2017 calling for imposition of penalty under Section 78 for irregularity found in the financial year 2012-15. It is not understood as to what irregularity was noticed by the respondent department between 01.04.2015 to 03.02.20....