M/S Dhanuka Agritech Ltd vs C.S.T.-Delhi-Iv
- CitationAppeal No. ST/51568/2015-ST(SM)
Ratio decidendi
The rule this decision rests on
A clerical error in the closing balance shown in an ST-3 return does not by itself disentitle the assessee to the Cenvat credit actually availed, where the correct balance is reflected in the books of account and supported by a chartered accountant's certificate; the Tribunal treated this as a matter of procedural omission to be examined on the evidence. Cenvat credit claimed on the basis of debit notes issued by a service provider is admissible only where the debit notes establish that the service tax was actually paid, and where the debit notes do not bear the service provider's registration number the question whether such tax was paid must be verified on the record before credit can be allowed. Where the factual verification of such debit notes has not been carried out by the adjudicating authority, the matter is to be remanded for de novo adjudication, with the authority directed to examine the debit notes and to consider the authorities cited by the assessee.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Date of Pronouncement: 16/07/2015
Appeal No. ST/51568/2015-ST(SM)
(Arising out of OIA No. 31/ST/Appeal-II/SM/GGN/2014-15 dated 17.02.2015 passed by Commissioner (Appeal-II) Service Tax, Central Excise Building Gurgaon, Haryana)
1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of the order?
4. Whether order is to be circulated to the Department Authorities?
M/s Dhanuka Agritech Ltd. Appellant
Vs.
C.S.T.-Delhi-iv Respondent
Appearance:
Present for the Appellant: Shri Puneet Bansal and Ms. Pritty Jain, Advocate
Present for the Respondent: Shri R.K. Gupta, DR
Coram: Honble Ms. Sulekha Beevi C.S., Member (Judicial)
Final Order No.52222/2015
Per: Sulekha Beevi C.S.
The appellants are aggrieved by the disallowance of Cenvat credit as Input Service Distributor.
2. The allegation leveled against the appellants are that as per ST-3 returns for the period April 2008 to September 2008 and October 2008 to March 2009, the closing balance of service tax and education cess for the month of September, 2008 was Rs.24,47,214/- and Rs.72,963/- respectively. Against this closing balance, the appellants had taken opening balance of service tax and education cess for the month of October, 2008 as Rs.41,94,127/- and Rs.1,25,824/- respectively. That in this way the appellants had taken excess opening balance of Rs.17,99,774/- collectively for service tax and education cess, and had thus wrongly availed credit.
3. It was submitted on behalf of the appellant, that while filling the ST-3 return as Input Service Distributor for the period April, 2008 to September, 2008 the closing balance was shown erroneously as Rs.24,47,214/- for service tax and Rs.72,963/- for education cess. This was corrected in the opening balance shown for the month of October, 2008. Thus as per books of account the appellant had a credit of Rs.43,19,951/- in the month of September 2008. The appellant had also furnished a C.A. Certificate showing the month wise details of Service Tax input credit available for distribution to their manufacturing units during the period April, 2008 to September, 2008. That the certificate would evidence that the appellants had committed error by showing the closing balance of Service tax in September, 2008 as Rs.24,47,214/-. Further, that the credit of Rs.17,66,710/- out of the amount under dispute (i.e. Rs.17,99,774/-) have been availed by the appellants on the basis of debit notes issued to the appellants by their C&F agents. The appellants relied upon the decisions rendered in Jagdamba Polymers Ltd. Vs. CCE, Ahmedabad 2010 (1) TMI 404-CESTAT, Ahmedabad, to substantiate their plea that error in ST-3 return is only a procedural omission and credit is admissible.
4. The learned Counsel also relied upon the judgment in M/s CMC Ltd. Vs. CC,CE& ST (Appeals-II), Hyderabad 2014 (6) TMI 134-CESTAT Bangalore and Pharmalab Process Equipments Pvt. Ltd. Vs. CCE, Ahmedabad 2009-TIOL-2215-CESTAT-Ahmedabad and contended that credit is admissible on the basis of debit notes.
5. The ld. DR reiterated the findings in the impugned order and submitted that if the appellants had committed mistake while filing the ST-3 returns for the period April, 2008 to September, 2008 then they ought to have filed revised ST-3 return instead of taking excess opening balance for the month of October, 2008. It is also his case that the debit notes are not valid documents for claiming Cenvat credit as per the Cenvat Credit Rules. The ld. DR pointed out that some of the debit notes did not contain the service tax registration of the service provider to ascertain whether the service tax has been actually paid.
6. Heard both sides and perused the records, it is seen that the appellant has claimed Cenvat credit of Rs.17,66,710/- on debit notes. Further, the amount was not included in the closing balance in ST-3 returns for the month September, 2008 due to clerical error. On perusal of the debit notes it is seen that some of these debit notes do not bear the service tax registration number. Learned Counsel for the appellant asserted that service tax as per these debit notes have been paid and that they are able to establish the same. In such circumstances I am of the view that the matter has to be remanded to the adjudicating authority to verify these debit notes.
7. In view of the above, it is deem fit that the matter be remanded to the Original Adjudicating Authority for denovo adjudication. The adjudicating authority shall examine the debit notes and also consider the application of the judgments cited by the appellants. The appeal is allowed by way of remand.
(Pronounced on 16/07/2015)
(Sulekha Beevi C.S.)
Member (Judicial)
K. Gupta
4
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