Whether denial of service tax credit acceptable when the worksheet on the basis of which demand was raised has not been provided to assessee?

PJ/Case Law/2013-14/1715

Case:- M/s MAHINDRA HOLIDAY AND RESORTS INDIA LTD Vs COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX LTU, CHENNAI

Citation:-2013-TIOL-1130-CESTAT-MAD

Brief facts:-The appellants are engaged in providing taxable service of “Club or Association Service” and facilities thereof to their members. It has been alleged that they have availed ineligible credit on input services during the period 01.04.2007 to 31.03.2008. The learned Commissioner confirmed the demand of tax Rs.50,84,289/- along with interest under Rule 14 of the CENVAT Credit Rules, 2004 and Section 75 of the Finance Act and imposed penalty under Section 76 of the Act as also imposed penalty of equal amount under Rule 15(4) of the said Rules and read with Section 78 of the Act.

Appellants contention: The learned counsel for the appellant fairly submits that they are not disputing the demand of tax of Rs.8,69,567/- on input credit availed on exempted services, which they have already paid. He submits that major amounts involved is Rs.24,10,286/- on the issue of tax short-paid as a result of utilizing the credit in excess of 20% and Rs.10,67,514/- on credit availed on wrong documentary were confirmed without providing worksheet of the demand. In this context, he drew the attention of the Bench to para 18 of the impugned order and upon a perusal of the same it can be inferred that the appellant's request to provide work sheet was not acceded to by the learned Commissioner so as to enable them to ascertain as to how the excess availment of credit amounting to Rs.24,10,286/- and Rs.10,67,514/- had been arrived at by the learned Commissioner. The learned Commissioner observed that the credit was denied on the ground that they have availed credit on the Debit Notes. It is also observed that the amounts mentioned in the invoices and relied upon documents are not tallying with each other and he has also proceeded on the basis of work sheet claimed to be enclosed to the show cause notice.

Respondents contention:The learned authorised representative for the Revenue submits that worksheet was already provided to the appellants and on that basis they have preferred the appeal before the Tribunal.

Reasoning of Judgement:-The tribunal was unable to accept the contention of the learned authorised representative. On a perusal of the show-cause notice, the CESTAT finds that there is no indication of the worksheet being annexed to it. On the other hand, the learned Commissioner proceeded on the basis of the worksheet. It is observed that the worksheet had been provided to the appellants and the same is available in the case records. The CESTAT is not convinced with the argument of the Revenue that the worksheet is available in the case records, which is annexed to the impugned order and, therefore, the demand is justified. In our considered view, it is a fit case, where the appellant deserved to be granted adequate opportunity to place its case before the adjudicating authority after going through the work sheet. We hold that the demand of tax except Rs.8,69,567/-, is not sustainable without providing the worksheet to the appellant. Hence the demand of tax of Rs.8,69,567/- on input credit availed on exempted service is upheld.

Decision:- Appeal allowed by way of remand.

Comment:- The analogy drawn from this case is that the basis of calculation of demand is mandatorily required to be provided to the assessee and in the absence of providing the same, the demand is not sustainable.

Comments

PJ/Case Law/2013-14/1715

Post a Comment

Query