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2014 (9) TMI 778 - AT - Service TaxDenial of CENVAT Credit - Works contract service - Held that:- As regards the demand of service tax for the period on or after 1.6.2007, the activity is liable to service tax under 'works contract service' and, therefore, if the appellant has discharged service tax liability under 'works contract service', the question of confirmation of the demand would not arise at all once again. The weak observation made in the impugned order is the appellant did not produce the requisite contracts so as to satisfy the adjudicating authority that they were entered into or on after 1.6.2007. This observation of the adjudicating authority is quite naive and cannot be accepted. If the adjudicating authority had any doubt about when the contract was entered into and the works executed, he could have asked the appellant to produce the copies of all the contracts which the appellant, in fact, claims that they have produced before the department. Therefore, this cannot be a ground for demanding service tax without any basis when the liability has in fact been discharged by the appellant. As regards the denial of cenvat credit of ₹ 168.82 crores, from the records it is seen that the appellant has availed only an amount of ₹ 134.26 crores during the impugned period. If that be so, we do not understand how a disallowance of a credit not availed can be made by the Revenue. It is also on record that the appellant has in fact reversed an amount of ₹ 47.62 crores towards the capital goods and GTA and foreign consultancy services which have been appropriated in the impugned order. Therefore, the denial of cenvat credit to the extent of ₹ 168.82 appears to be not based on any documentary evidences. Similarly, the demand of ₹ 90.78 crores being the credit actually utilized is also clearly not sustainable in law inasmuch as the said amount is already included in the cenvat credit disallowed. There cannot be any double demand towards cenvat credit, once by disallowing the entire amount of credit taken and second by a demand of credit utilized. Thus we find that there are a lot of inconsistencies/mistakes committed in the impugned order by the adjudicating authority. Therefore, the matter needs to go back to the adjudicating authority for fresh consideration. Accordingly we remand the matter back to the adjudicating authority. - Decided in favour of assessee.
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