AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 715
X X X X Extracts X X X X
X X X X Extracts X X X X
...., all located at the same address 13/34, WEA, Arya Samaj Road, Karol Bagh, New Delhi. Further, services were also procured from M/s Software Technology Group International Ltd. (STG), Gurugram. The inputs procured indicated the nature and description of services which were provided by the companies floated by Shri Tarun Goyal. Income tax investigations revealed that Shri Goyal had floated about 124 private limited companies and firms with common addresses, none of which had substantive business activities. These companies were mainly conduits for generating bogus invoices with fictitious bank accounts and employees acting as proxies for directors. The Income Tax department found that the service tax charged on these invoices was neither deposited nor remitted to the Government. The respondent had availed CENVAT credit on these input service invoices, which subsequently turned out to be fraudulent, as was established by the Income Tax Department during their investigations which revealed that the companies issuing the input invoices to respondent were among the 124 fictitious firms floated by Shri Tarun Goyal. The respondent was unable to prove the genuineness of the input services ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oves that companies issuing input invoices did not exist as genuine service providers. Postal returns and unresponsive phone numbers had confirmed that these were phantom companies. The respondent had failed to produce proof of receipt of service or payment of service tax thus negating the admissibility of credit. (ii) Rule 9(6) specifically places the onus on the service recipient for admissibility of the credit, which the respondent had failed to discharge. (iii) Entries made in the accounting records before the date of invoice issue, along with overwriting of date also amounted to fabrication of books, which is a serious offence under law. The Commissioner (Appeals) had erred in dismissing this as insufficient to deny the entire credit. (iv) As the respondent had provided both exempt and taxable services without maintaining proper segregated accounts, credit eligibility must be restricted or disallowed as per Rule 6(3). The Commissioner (Appeals) was incorrect in ignoring. (v) The department can invoke Section 73A where service tax collected from clients remained unpaid to the Government. The respondent had collected tax from clients and adjus....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., Gurgaon, Haryana. The address of first three companies namely M/s Macro Infotech, M/s Campari Fiscal Service Pvt. Ltd. and M/s GEEFCEE Infosys and landline number appearing therein are identical matching with the address of Sh. Tarun Goyal's companies. Investigations by the Income Tax Department in respect of M/s Macro Infotech, M/s Campari Fiscal Service Pvt. Ltd. and M/s GEEFCEE Infosys had established that these were among 124 firms/companies floated by Shri Tarun Goyal to raise bogus invoices/bills. We find that it has been conclusively established by the Income Tax department that M/s Macro Infotech, M/s Campari Fiscal Service Pvt. Ltd. And M/s GEEFCEE Infosys were among 124 firms/companies floated by Shri Tarun Goyal. Further, it is on record that Shri Tarun Goyal never came forward to participate/co-operate in the investigation. Since, it was already established that M/s Macro Infotech, M/s Campari Fiscal Service Pvt. Ltd. and M/s GEEFCEE Infosys were among 124 firms/companies floated by Shri Tarun Goyal to raise bogus invoices/bills, the receiving back of letters with Post Office remarks 'left' or 'no such company exist and the phone numbers available o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....services provided by them as per Rule 6(3) of the CCR, 2004. We find that the Commissioner (Appeals) has held that the demand of Cenvat credit of Rs. 20,07,497/- pertaining to the period 01.04.2006 to 30.09.2006 was time barred. We find that as per the provisions of Section 66 read with section 68 and section 70 of the Finance Act, 1994, the respondent was liable to deposit the Service Tax and cesses on the services provided by them, including the amount adjusted against the fraudulent cenvat credit availed by them. It is evident from the sale invoices that the respondent had recovered Service Tax and cesses from their clients. It is evident that cenvat credit of Rs. 79,72,189/- had been availed on input invoices issued by non-existent firms during Financial Year 2006-07 to 2008-09. Further, the respondent failed to deposit the service Tax recovered from the clients to the Govt. exchequer in contravention of section 68 and section 70 of the Finance Act 1994 and Rule 6 and Rule 7 of Service Tax Rules 1994. Section 73A holds as follows:- "Service tax collected from any person to be deposited with Central Government (1) Any person who is liable to pay service tax und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rules. The relevant para is reproduced below:- "After hearing learned counsel for the appellant at length, it is clear that in case the service provider opts not to maintain separate accounts of inputs service meant for consumption in relation to rendering of such services which are chargeable to service tax as well as exempted services or non-taxable services, he shall be allowed to utilize service tax credit for payment of service tax on any output service only to the extent of an amount not exceeding 35% of the amount of service tax payable on such output service. Since the appellant was providing taxable as well as non-taxable services, utilization of service tax credit was thus restricted to 35% of service tax payable. The adjudicating authority has reduced the demand of service tax of Rs.3,41,502/- as interconnecting usage charges were not taxable for the period August 2002 to April 2003. During the period 16.8.2002 to 13.5.2003, interconnecting usage charges were not exempted service and the appellant was eligible for utilizing Cenvat credit without restriction of 35%. The plea of appellant is not sustainable for the remaining period. It is apparent that the appella....