Service tax – Cestat Mumbai: Registration is not relevant in the absence of evidence of non-utilization of the capital goods in rendering of ‘output service’ and of eligibility to credit even if the address on invoices is other than the registered one – Matter remanded to reconsider [Order attached]
Order date – 29 November 2022
- The appellant, M/s Seven hills Constructions is engaged with providing of ‘mining services’ that was legislated as liable to tax with effect from 1st June 2007, however, they acquired registration only on 3rd October 2008.
- The Appellant impugns three separate recoveries of which two totaling to ₹1,28,38,643, under authority of rule 14 of CENVAT Credit Rules, 2004 for being credit held as ineligible on two separate counts even as availment of depreciation under Income Tax Act, 1961 was assailed as breach in common while the other arose from failure to discharge tax liability on ₹6,95,97,698 earned for rendering of taxable service for the period from 1st April 2009 to 30th September 2009 for which section 73 of Finance Act,1994 has been taken recourse to.
- Whether the appellant is entitled to impugned recoveries?
- The Tribunal finds that adjudicating authority has failed to consider the altered paradigm consequent upon notification of Point of Taxation Rules, 2011 by which the regime of taxation of receipts was substituted by taxation of accruals. The impugned order has also failed to take into consideration the liability discharged by the appellant; settled law on such compliance must be given effect to.
- It states that the adjudicating authority is required to consider the evidence furnished by the appellant that duty liability having been discharged on ‘tippers’ sourced by them, as now placed on record, before concluding that the credit availed therein is ineligible.
- The impugned order is, thus, bereft of findings based on law, as enacted and judicially determined, applied to the facts put forth by the assessee and requires re-determination. To enable this, set aside the impugned order and remand the matter back to the original authority for fresh disposal of show cause notice after granting opportunity to assessee to make submissions on all issues.
- Hence the appeal is allowed.