TaxTMI 
TaxTMI 
2025 (6) TMI 765
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....the financial institutions. The said work was outsourced/sub-contracted to one Mr.Amitabh Ghosh then representing M/s Prabhav Industries Limited (PIL) and the same was formalized through a Memorandum of Understanding ("MOU") dated 2 January 2016. The said service provider was duly registered with the Service Tax Department which provided the services to the appellant and raised invoices dated 14.03.2016 for providing the said services. The appellan availed the cenvat credit on the said invoice and reflected the same in the ST-3 Returns. 2.1 An investigation was conducted in October 2017 in the context of inadmissible CENVAT Credit availed by one M/s Design Tech Systems Limited which extended to the extant service provider, a Show-cause Notice dated 20 April 2021 was issued to the Appellant alleging wrongful and fraudulent availment of CENVAT Credit on the strength of the Invoice raised by the service provider, namely PIL. It is the case of the Revenue that the said service provider is a shell entity not engaged in any legitimate business by placing reliance on (a) incriminating statements tendered by a Chartered Accountant, Mr Chirag Mehta, the alleged manager/controller of the ....
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.... scope of work entrusted to PIL. 3.3 The ld.Chartered Accountant further submitted that the appellant was a bonafide purchaser of input services for value from PIL on the basis of a valid and effective service tax registration issued to PIL by the service tax department and the credit of service tax was availed by the appellant on the strength of an agreement, legitimate tax invoice including payment of consideration through proper banking channel to PIL not entailing any violation of Rule 3, Rule 4 or Rule 9(1) of the CCR as alleged or at all. 3.4 He further submitted that non-deposit of service tax by PIL in respect to the tax invoice raised upon the appellant can be no ground to deny service tax credit to the appellant alleging violation of Rule 3 of the Cenvat Credit Rules especially when there is no evidence of connivance of the appellant with PIL. 3.5 To support, he relied on the decision of the Hon'ble Jharkhand High Court in the case of Commissioner of Central Excise, East Singhbhum Vs. Tata Motors Limited reported in 2013 (294) ELT 394 (Jhar.) and he also relied on the decision of this Tribunal in the case of L.G.Electronics India Pvt.Limited Vs. Commissioner of C....
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....entered into an agreement to provide the services to KIP towards pre-payment of loans and obtaining No Due Certificate from the financial institutions,the said service was outsourced to PIL by the appellant and PIL has raised invoice on the appellant for providing the said services. For better appreciation, the said invoice is extracted herein below : and KIL has also obtained No Due Certificate with regard to pre-payment of loans from the financial institutions. These facts are admitted facts. 6.1 In these circumstances, it is required to be seen that whether the appellant has obtained the NOC through PIL or not ? However, as per the appellant, it is stated that the said service has been outsourced. 6.2 In fact, in this case, the denial of cenvat credit is on the basis of three grounds, namely, (a) that on the basis of Alert letter dated 07.08.2017 issued by SEBI ; (b) Non-payment of service tax by PIL and (c) various statements recorded during the course of investigation. 7. Admittedly, the Alert letter has been issued by SEBI on 07.08.2017 whereas the appellant has obtained the NOC through PIL on 14th March, 2016. Therefore, the denial of c....
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....of of the tax deposited by it with the Government and that non-deposit of tax by the service provider cannot be a ground to deny credit to the service recipient. They have further pointed out that through Sections 73 and 73A of Finance Act, 1994 law has provided legal remedy to the Department for recovery of Service Tax not paid as well as Service Tax collected but not deposited with the exchequer and it is not the responsibility of the service receiver to ensure payment of Service Tax by service provider. They have further contended that the extended period of limitation was not admissible to be invoked in the present show cause notice though the allegation was made on the show cause notice that is connivance of the appellant with the service provider but such an allegation has not been supported by any evidence. The Original Authority did not appreciate the submissions of the appellant and through Order-in-Original Nos. 48-52/Commissioner/Noida/2013-14, dated 29-1-2014, adjudicated the said show cause notice and confirmed the demand and disallowed the Cenvat credit of Rs. 3,32,76,600/- to the appellant. He imposed equal penalty on appellant. Further, he imposed penalty of Rs. 10 ....
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....rtment for their Delhi unit, but their NOIDA unit, who has actually provided the services were not registered. However, registration number stands given in the invoice along with the amount of Service Tax. The appellant is neither expected nor is under any legal obligation to find out that the Service Tax so mentioned in the invoices stands actually paid by the service provider or not. 6. In terms Rule 4(7) of Cenvat Credit Rules readwith Rule 9 of Cenvat Credit Rules, the only requirement of the assessee is to pay the value of the services as also the quantum of service tax as assessed in the invoice raised by the service provider and then to avail the credit. The assessee cannot be held responsible for any default in non-deposit of duty by the service provider and the credit of the service tax paid by him to the service provider for further deposit in the exchequer kitty cannot be denied to him on account of the lapse of the service provider. The Revenue's remedy, in these types of cases lies at the end of service provider, for initiating proceedings against him, in respect of the short levy of service tax. 7. We further note that the said issue of non-payment o....
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....rvice tax by the service provider, who is registered with the Service Tax Department as service provider. 12. We further take note of the fact that the statement which has been relied upon by the adjudicating authority in the impugned order to deny the cenvat credit, did not examine in terms of Section 9D of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 as held by the Hon'ble Punjab & Haryana High Court in the case of Ambika International Vs. Union of India reported in 2018 (361) ELT 90 (P & H), wherein the Hon'ble High Court held that the statements recorded during the course of investigation, have no evidentiary value unless and until tested in terms of Section 9D of the Central Excise Act, 1944. In that circumstances, the said statements cannot be the basis to deny the cenvat credit to the appellant. 13. We further take note of the facts that the cenvat credit was taken by the appellant on 14.03.2016, which has been duly reflected in their Books of Account as well as in their ST-3 Returns. In that circumstances, the show-cause notice issued to the appellant is highly barred by limitation. In that circumstances, the appellant succeeds on limitat....