Custom, Excise & Service Tax Tribunal
Prasad Corporation Ltd vs Commissioner Of Service Tax-Ii on 31 May, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.ST/41031/2015
[Arising out of Order-in-Appeal No.58/2015 (STA-II) dt. 11.2.2015 passed by the Commissioner of Service Tax
(Appeals-II), Chennai]
Prasad Corporation Ltd.
Appellant
Versus
Commissioner of Service Tax-II,
Chennai Respondent
Appearance:
Shri V. Ravindran, Advocate For the Appellant Shri L. Paneerselvam, AC (AR) For the Respondent CORAM:
Honble Shri P.K. Choudhary, Judicial Member Date of hearing :13.04.2016 Date of Pronouncement :31.05.2016 FINAL ORDER No.40863/2016 The appeal is filed by the appellant-assessee against the impugned order-in-appeal dt.11.2.2015 passed by Commissioner of Service Tax (Appeals-II) Chennai.
2. The appellant is engaged in providing services such as Graphics, Special Effects and Animation etc. and are registered with service tax department under the category of Photography Service, Management, Maintenance or Repair Service and Information Technology Service. On verification of cenvat credit documents by the department, it was found that certain documents did not have service tax registration number. It was alleged that the appellant had availed on the basis of improper documents to the tune of Rs.3,00,639/- for the period from April-2009 to March-2010, resulting in short payment of service tax under Rule 14 of CCR 2004. It was further noticed that appellant had availed cenvat credit on input services like House Keeping Services, Pest Control Service etc., which were not used for providing output services, in contravention of Rule 2(l) of CCR, 2004. Further, in respect of certain invoices, though the input service provider only applied for service tax registration, cenvat input credit has been availed on such invoices by the service provider (appellant) against the provisions contained in sub-rule (2) of Rule 9 of CCR 2003, thereby wrongly availed credit to the tune of Rs.77,192/- in respect of aforesaid two services. Hence a show cause notice dt. 20.10.2010 was issued to the appellant proposing recovery of an amount of Rs.3,77,731/- being wrong credit taken and utilized by them along with interest and also proposing imposition of penalty under Section 76 and also Rule 15 (3) of CCR 2004.
2.1 The original authority adjudicated the notice and vide OIO dt. 27.4.2011 and confirmed the demand of Rs.1,06,052/- under Section 73 (2) of the Finance Act along with interest on the issue of availment of credit on improper documents and on the second issue, granted relief on availment of credit in respect of input services viz. house-keeping and office maintenance (pest-control service). The adjudicating authority appropriated the amount of Rs.57,738/- being the credit already reversed by the appellant towards the demand. He imposed a penalty of Rs.10,000/- under Rule 15 (1) of the CCR 2004. On appeal, the learned Commissioner (Appeals) vide impugned order dt. 11.2.2015 upheld the OIO but remitted the case to the lower authority to verify the relevant invoice submitted by appellant to the tune of Rs.29,613/- and for passing appropriate orders. Aggrieved by the said order of learned Commissioner (Appeals), the appellant preferred the appeal before Tribunal.
3. Heard both sides. The Commissioner (Appeals) had, in para 5 of his order tabulated the issues under dispute and in para 6, he had stated that the grounds through which the appellant had assailed the impugned order are bald allegations unsupported by relevant documents and had remanded the matter back to the original authority only with respect to Sl.No.1 in the Chart which is that the Appellant did not furnish proper documents to claim eligibility of cenvat credit.
4. As regards the invoice raised on M/s Prasad Corporation Limited, Mumbai, in respect of input service, it is the contention of the Appellant that the service provider has erroneously raised an invoice on their Mumbai Branch. This appears to be a mistake committed by the Service Provider for which the Appellant should not be punished. Credit is eligible as long as the duty payment particulars are genuine. The Appellant placed reliance on the Tribunal Ruling in the case of Tool Tronics Vs CCE, Mumbai-II reported in 2006 (205) ELT 946 (Tri.-Mumbai) which is applicable to the case on hand. The Credit is therefore held to be eligible.
5. With regard to the next issue i.e input service invoice did not contain the Service Tax Registration Number, the appellant had accepted the same and reversed the credit availed to the tune of Rs.150/- only. This issue is, therefore, closed as not pressed.
6. As regards the cenvat credit availed on the basis of invoices issued by the Service Receiver i.e M/s. J.K. Add Film & Myth Production, it is the contention of the appellant that this amount was not availed as cenvat credit but by mistake, there was an excess payment which was adjusted under Rule 6 (4A) of the Service Tax Rules. On yet another aspect viz. payment made for internet subscription, the matter has been remitted back to the Original Authority for causing verification. The Commissioner (Appeals) ought to have adopted the same stand for the other issues as well. There is no scope before the Tribunal to examine the veracity of the documents and therefore the matter is remanded back to the Adjudicating Authority in so far as the issue pertaining to the alleged excess payment of service tax in a sum of Rs.57,588/-. All the above issues being purely interpretative in nature with no malafides, penalty is set aside. The Adjudicating Authority shall follow the principles of natural justice by affording a reasonable opportunity of hearing to the Appellant, while hearing the matter afresh.
7. In the result, Appeal is allowed in so far as a sum of Rs.18,701/- is concerned. With regard to the sum of Rs.150/-, the same is rejected as not pressed. With regard to a sum of Rs.57,588/-, the matter is remanded to the Original Authority. The appeal is disposed off in the above terms.
(order pronounced in open court on 31.5.2016) (P.K.CHOUDHARY) JUDICIAL MEMBER gs 5