2021 (10) TMI 1127 - AT - Service Tax

CENVAT Credit - duty paying documents - denial of credit on the strength of invoices issued by its Head Office as ISD on the ground that the said input service credit was availed on the basis of photocopy of the certificate issued by the Banks in favour of Head Office (ISD) - suppression of facts or not - invocation of extended period of limitation - HELD THAT - There is no dispute about the receipt of services inasmuch as the appellant has duly received the services from Bank and that payment of the Banking charges for loan processing and upfront fee have been duly made since not disputed in the impugned orders. It is also seen that the order passed by the authorities below have travelled beyond the allegations made in the SCN. When no dispute was made by the adjudicating authority with regard to the photocopies of documents, the objection raised by the Ld. Commissioner (Appeals) is not justified when, in-principle, he has agreed with the service eligibility under Rule 2(l) of the Credit Rules and the fact that receipt of Banking service is not in dispute. Hence, there are no reason to deny the credit and hence, the appeal is liable to succeed. Time Limitation - HELD THAT - SCN has been issued in June 2014 by invoking extended period of limitation. Apart from the general aversion, there is no evidence to show that credit has been wrongly availed by way of fraud or suppression when the credit amount availed by the appellant has been duly disclosed in the periodical returns filed with the Department. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of Cenvat Credit for the period from April 2009 to December 2011 based on the denial of credit availed on the strength of invoices issued by the Head Office as 'ISD' and the allegation that the services of the banks for financial requirements were not directly or indirectly connected to the manufacture of the final product.

Analysis:
The Appellate Tribunal heard arguments from both sides regarding the denial of Cenvat Credit by the authorities based on the services provided by the banks for financial needs. The Assistant Commissioner had initially denied the credit, stating that the banking services were not related to the manufacturing process. However, the Commissioner (Appeals) upheld the credit entitlement for banking services but objected to the credit being availed based on photocopy documents.

Upon review, the Tribunal found that the appellant had indeed received banking services and made payments for loan processing and upfront fees, which were not disputed. The Tribunal noted that the authorities had gone beyond the allegations in the Show Cause Notice (SCN) as no dispute was raised regarding the photocopies of documents. The Commissioner (Appeals) agreed with the eligibility of banking services under the Credit Rules but objected to the photocopy issue, which the Tribunal deemed unjustified.

The Tribunal concluded that there was no valid reason to deny the credit as the appellant had received the banking services, and the objection raised by the Commissioner (Appeals) was unfounded. Additionally, the Tribunal addressed the limitation aspect, stating that the demand was barred by limitation as the credit availed was disclosed in the returns filed with the Department, and no evidence of fraud or suppression was presented. Consequently, the appeal was allowed, and any consequential relief was granted.

This comprehensive analysis of the judgment highlights the key arguments, decisions, and reasoning behind the Appellate Tribunal's ruling on the denial of Cenvat Credit for the specified period.