By TIOL News Service

MUMBAI, JUNE 18, 2014, CENVAT credit of Rs.66.55 lakhs was denied by the Commissioner of Central Excise, Raigad Commissionerate on the ground that the credit was taken by the appellant on the strength of invalid/incomplete documents. Penalty and interest quantum have also been added in good measure.

Before the CESTAT with a Stay application, an early hearing application and an appeal, the appellant submitted that the allegation in the SCN is that the invoices of the service providers, who rendered the services to the appellant, did not contain their registration numbers. It is emphasized that the services were received by the Head Office which is registered as input service distributor and the Head Office issued ISD invoices for availment of credit. The first contention is that there is no short coming as the Credit was taken by the appellant based on the ISD invoices issued by the Head Office and secondly during the course of adjudication proceedings, they had submitted a list containing the service tax registration numbers of all the service providers. Therefore, the department could have verified whether these service providers were registered with the department or not and the service tax amounts indicated in the corresponding invoices issued by the service providers were in fact paid to the exchequer or not. Merely for the technical lapse of non-mentioning of the registration number, the substantive benefit of credit cannot be denied or disallowed to the appellant.

The Revenue representative had a thought provoking submission - he said that in the details given to the department with regard to the registration numbers, the invoices mentioned therein pertain to the subsequent period and, therefore, it cannot be concluded that at the relevant time these service providers were registered with the department. He pleaded that the appellant be put to terms.

The Bench took up the appeal itself for disposal after dispensing with the requirement of pre-deposit.

And thereafter the Bench came down heavily on the adjudicating authority in the following words -

+ It is the fact on record that during the adjudication proceedings, the appellant had provided to the department, the registration number of the service providers. Therefore, the adjudicating authority could have easily verified whether these service providers were registered with the department at the relevant time and whether they had discharged the service tax liability in accordance with the law.

+ He has unnecessarily chosen to raise the level of litigation by denying the credit as if it is Tribunal's job to get verification done.

Saying so, the CESTAT remanded the matter back to the adjudicating authority for verification of the registration numbers and the factum of service tax payment.

The appeal was allowed by way of remand. Stay petition and the application for early hearing also stand disposed.

(See 2014-TIOL-1049-CESTAT-MUM)