TaxTMI 
TaxTMI 
2023 (2) TMI 607
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....dies in cities like Bangalore, Hyderabad, Chennai, Mumbai, Pune etc. due to their experience and knowledge. 2. The auditors of the office of Director General of audit, Central Taxes, conducted audit for the period 2006-2009 during 08.03.2010 to 15.03.2010, the audit revealed the following errors; i) The appellant have wrongly availed Cenvat credit of service tax of Rs. 6,17,84,781/- paid on input service-consulting engineering service during April, 2004 to August, 2007, as the appellant was providing exempt service of Transport of passengers. ii) The appellant have wrongly availed Cenvat credit of Rs. 66,17,317/- based on the invoices which are addressed to other offices of the appellant and not their registered office. 3. It further appeared to revenue that as per Rule 6(1) of CCR, 2004 assessee is not entitled to take Cenvat credit of input service used for rendering exempted output service. Further Rule 6(2) provides for maintaining of separate accounts for input services to be used for rendering taxable output service and tax free services, further Rule 6(5) provides that notwithstanding anything contained in sub-Rule 1, 2 & 3. Thus, credit of the whole ....
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....cause notice dated 23.04.2014. Secondly, as regard the credit of Rs. 66,17,317/-, it was clarified that the said amount is the aggregate bill amount from the service providers, and the actual amount of service tax involved was Rs. 5,23,936/- only. Thus, the correct amount of service tax under dispute in the SCN dated 19.10.2010 under reply is Rs. 18,47,143/-, that is (Rs. 13,23,207+Rs. 5,23,936). It was further urged that the SCN is time barred as the same have been served only on 22.09.2015 and thus it is beyond the extended period of limitation also. It was further contended that the SCN is bad as the same is based on a local audit report does not contain the details or gist of facts thus, rendering the SCN as vague. 5. It was further contended that the appellant have correctly availed the Cenvat credit on consultancy engineering service as the assessee have provided taxable output service of consultancy engineering to other metro projects in other cities. Thus, the input credit taken satisfies the conditions precedent under the Cenvat Credit Rules. It was further contended that credit taken was on the strength of invoices addressed to the other office(s) of the appellant is c....
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....he office register). In Regent Overseas Pvt. Ltd. Vs. Union of India, 2017 (6) G.S.T.L. 15 (Guj.), Hon'ble High Court has held that, in absence of any proof of delivery, it cannot be said that there is effective service of notice as contemplated u/s 37C of the Central Excise Act. Since the SCN was served on the appellant beyond the limitation period, the SCN was time barred. 8.3 Even otherwise, the adjudicating authority has not applied its mind to the issues and has mechanically gone by the report received from CERA audit, which had advised the Department to examine the issue flagged by them. The audit was conducted from 8th - 15th March 2010. The SCN has been issued seven months later on 19.10.2010, though received by the appellant after five years. Even on the date of SCN, five years limitation period had expired for the period April 2004 to March 2005. For the rest of the disputed period, the normal period of one year had expired on the date of the SCN. There is no justification for invoking the extended period even on the date of the SCN. Disallowance of cenvat credit on consulting engineer's services 8.4 The appellant, while implementing, Delhi Metro project, had obt....
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....l consultants) and global contractors. To generate revenue, the appellant had decided to provide technical consultancy service on commercial basis in 2001-02. 8.7 The Pr. Commissioner has ignored the Directors' reports (pages 42-45 of appeal memo) and main objectives of the appellant corporation, while holding that there is no evidence that such consulting engineer's service received for Delhi metro rail project was used for rendering consultancy service for the other projects. As the Directors' report states, the consultancy service was used by the appellant for the Delhi project and also used for giving Engineering Consultancy to other metro projects. Therefore, the input credit on consulting engineer's service was 100% allowable under Rule 6(5) r.w. Rule 2(l) of the Cenvat Credit Rules. 8.8 Even if the input tax credit was not eligible, there is no application of mind by the Pr. Commissioner. She has mis-conceived what the CERA has reported. It is wrong to allege that the appellant has utilised cenvat credit of Rs.6,17,84,781 during 2006-09. The Pr. Commissioner has ignored the documents supplied by the Superintendent (Adj.) to the appellant along with his letter dated 03.....
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.... the bid for construction etc. was accepted in favour of Reliance Energy Ltd. (renamed as Reliance Infrastructure Ltd.) by issue of letter of acceptance on 21.01.2008. 10. The aforementioned observations of the Supreme Court also fortifies that the appellant was engaged in providing consulting engineering service. Further, admittedly appellant have disclosed receipts and tax liability for consulting engineering service provided to other Metro rail projects, during the period under dispute. 11. Opposing the appeal, learned AR for revenue, inter alia urges that Rules 6(1) of CCR disallow Cenvat credit on such input or input service which is used in manufacture of exempted goods or for provision of exempted services. Further, Rules 6(2) of CCR provides maintenance of separate account and records for receipt, consumption and inventory of input/input services, meant for use of manufacture of dutiable output and tax free output, goods or services and shall thus take credit of input credit attributable to taxable output of goods or service. Further Rule 6(3) provides that if an assessee does not maintain separate accounts but is taking credit of common input or service utilised both....
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.... the receipt and movement is recorded to ensure safe delivery. Further urges that speed post is equivalent to registered post as per statutory presumption under Section 27 of General Clauses Act. 13. Learned AR further urges that the appellant-assessee was operating under self-assessment scheme which was introduced vide Finance Act, 2001. Under the self-assessment regime, the superintendent of Central Excise/Service Tax is empowered only to verify the correctness of the returns. The assessee is required to assess, the tax due on the services provided by them and furnished the details in the Return Form (ST-3). It is the onus of the assesse to file correct return. In the instant case, the appellant-assessee did not seek any clarification from the department, but have suo moto utilised inadmissible Cenvat credit of consulting engineering services, for payment of service tax liability. Thus, the appellant have wilfully and deliberately suppressed the facts by way of availing inadmissible Cenvat credit resulting in evasion of payment of service tax. Further, under the facts and circumstances, there was suppression as well as contravention by the assessee. Had the audit not detected ....
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....pecifies documents required for availing Cenvat credit. It is the appellant case that the consulting engineering service received by them was meant for phase-I or phase-II of Delhi Metro. Thus, there is no corelation of the input consultancy engineering service received by the appellant with the output consultancy service rendered to others. 16. As regards the disallowance of Cenvat credit of Rs. 5,22,936/- is concerned, the same have been taken on the strength of invoices issued to the offices of the appellant situated in other cities, which are unregistered like Hyderabad, Chennai, Pune, Kolkata etc. Input services were received and consumed at those unregistered offices and not utilised for providing final output services. Hence, the amount of Rs. 5,22,936/- have been rightly disallowed under Rule 14 of CCR. 17. Having considered the rival contentions, we find that admittedly, appellant have provided taxable output service of engineering consultancy service to other metro projects located in other cities like Hyderabad, Chennai, Pune, Kolkata etc. For providing this service, appellant have also set up offices in those cities. Rule 2(l) of CCR provides -input service means ....