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M/s. National Aviation Co. of India v/s Commr. of Service Tax-Kolkata

    S.P-109 of 2011 & Service Tax Appeal No. 43/2011 (Arising Out of the Order-in-Original No.21/Commr./ST/Kol/2010-11 dated-19.11.2010 passed by the Commissioner of Service Tax, Kolkata)

    Decided On, 06 January 2014

    At, Customs Excise Service Tax Appellate Tribunal East Regional Bench Kolkata


    For the Appellant: Sushil Kr. Goyal, C.A. For The Respondent: Anirudha Roy, Supdt. (A.R.).

Judgment Text

D.M. Misra, J.

1. This is an application seeking waiver of pre deposit of CENVAT Credit of Rs.93,41,785.00 and penalty of Rs.95,39,446.00 under Rule 15 (4) of Cenvat Credit Rules, 2004.

2. The Ld. Chartered Accountant Shri Sushil Kr. Goyal for the applicant submits that the applicant is a public sector undertaking and engaged in providing various taxable services during the relevant period from April 2005 to March, 2008. He has submitted that from the total amount of CENVAT Credit disallowed, Rs.82.47 Lakhs relates to input services, namely catering services, rendered to the passengers, Rs.10.48 Lakhs related to the CENVAT credit which was not due in the particular month, being in excess of 20% limit prescribed under Rule 6 (3) of the CENVAT credit rules, but utilized while discharging their service tax liability. Ld. Chartered Accountant submitted that they have never availed CENVAT Credit on input services viz. catering services and hence confirmation of demand on this count, is incorrect. In support, he has submitted the Chartered Accountant’s certificate showing the total service tax liability discharged by them during the period 2005-06 and 2007-08, and also the fact that they had not availed CENVAT Credit on the quantum of Service Tax paid on catering services. He has fairly accepted that though they have made a general plea before the Ld. Commissioner, while submitting their reply to the show cause notice but failed to file necessary evidences including the Chartered Accountant’s certificate, before the Ld. Commissioner. Regarding inadmissible credit of Rs.10.48 Lakhs, the Ld. Chartered Accountant submits that during the relevant period, they have at various points of time exceeded the admissible credit limit of 20%, as prescribed under Rule 6 (3) of CENVAT Credit Rules, 2004, but, in the event, the total eligibility of CENVAT Credit availed in a year is considered, then no excess credit was taken during the relevant period. The Ld. Chartered Accountant has referred to the following cases:

i). Vodafone Essar Digilink Ltd. Vs. Commr. of C.Ex., Jaipur-I -2008 (12) S.T.R. 243(Tri.-Del.)

ii). Vijayanand Roadlines Ltd. Vs. Commissioner-2007 (7) S.T.R. 219 (Tribunal).

Regarding the other issues, the Ld. Chartered Accountant submits that they have already reversed CENVAT Credit involved , accepting their liability.

3. The Ld. A.R. for the Revenue on the other hand, submits that the relevant Chartered Accountants certificate, now produced before this Tribunal, were not placed before the Ld. Commissioner during adjudication. Therefore, the same could not be examined in the light of the claims of the Applicant. Further, the Ld. A.R. for the Revenue submits that the amount of CENVAT Credit admissible at the end of the month, can only be utilized for payment of the Service Tax liability, and in the present case, since the applicant had exceeded the admissible limit of 20% as laid down under Rule 6 (3) of CENVAT Credit Rules, 2004, during the relevant period the excess credit is not admissible. He submits that the judgment cited by the Ld. Chartered Accountant is not applicable to the facts of the present case as in the said cases, the issue was availability of credit lying in balance, which was incorrectly disallowed, on the ground that the same had lapsed. He submits that he has no objection in remanding the case, but the Applicant be put into terms.

4. After hearing both sides for some time, we find that the appeal itself can be disposed off at this stage. Hence, with the consent of both sides, we take up the appeal for disposal.

5. We find that the major portion of CENVAT Credit dispute involved, is on catering service. The appellant disputes, availing of credit on such service and the Ld. C.A. for Appellant categorically submitted that at no point of time, they have availed CENVAT Credit on air catering services. We find from the records that the applicant had not produced the evidences including C.A.s certificate, now produced before us, before the adjudicating authority. We find force in the submission of the Ld. A.R. for the Deptt. that the Chartered Accountants certificate need to be scrutinized in the light of the facts of the case. We also find force in the contention of Ld. A.R. that the credit available at the end of month, can only be utilized towards payment of Service Tax liability for the month. We are of the view that the evidences now placed before us need to be scrutinized. Accordingly, the case needs to be remitted to the Ld. Commissioner for deciding the issue afresh. At this point, we also agree with the submission of the Ld. A.R. that the applicant be put into terms. Consequently, we direct th

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e applicant to deposit 25% of Rs.10.48 Lakhs within a period of four weeks from today and report compliance directly to the Ld. Commissioner. Ld. Commissioner after recording the compliance of the said deposit, would proceed with adjudication of the case afresh. We make it clear that all issues are kept open and we have not expressed our view on any of the issues. It is needless to say that the appellant be given adequate opportunity of hearing before deciding the case. The appeal is allowed by way of Remand. S.P. disposed off.