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ST - SCN issued is without any foundation and, therefore, adjudication order confirming the demand on such cryptic SCN, cannot be sustained : CESTAT

By TIOL News Service

MUMBAI, APRIL 24, 2018: ON the basis of Audit objection, a show cause notice was issued proposing denial of cenvat credit of Rs.64,21,906/-.

The Commissioner of Service Tax, Mumbai confirmed the demand and imposed an equal penalty.

In appeal before the CESTAT, the appellant submitted that there is no documentary evidence relied upon in the SCN and there is no basis for proposal of denial of cenvat credit of Rs.64,21,906/-. Moreover, as per ST-3 return filed for the month of January 2007, the total credit availed was Rs.13,91,328/- and, therefore, the entire show cause notice was without any basis.

The AR submitted that in the order-in-original, the Commissioner had relied upon a statement given by the appellant while denying the cenvat credit. A copy of audit report wherein only an amount of Rs.64,21,906/- was shown in the month of January 2007, in respect of which the invoices were not available with the appellant, was also produced.

However, on a query from the Bench whether any such statement was considered for issuance of the show cause notice, the AR could not reply in the affirmative.

The Bench, therefore, observed -

++ We find that though there is a proposal of denial of cenvat credit of Rs.64,21,906/- in the show cause notice for the month of January 2007, however, no detail of such amount of cenvat credit was relied upon in the show cause notice. Therefore, the show cause notice was issued without any basis.

++ Even as per the audit report, nothing is coming out that cenvat credit of Rs.64,21,906/- relates to which invoices. As regards the statement referred in the order-in-original, no such statement was said to have been given by the appellant as per their submission. Even the learned AR also could not obtain such statement.

Viewing that the show cause notice issued is without any foundation and, therefore, the adjudication order confirming the demand on such cryptic show cause notice, cannot be sustained, the same was set aside and the appeal was allowed.

(See 2018-TIOL-1297-CESTAT-MUM)


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