The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Rajasthan Housing Board is entitled to cenvat credit during transitional issues arising with respect to payment of service tax.
The CESTAT held that Circular F. No. 137/16/2017-Service Tax dated 28th September 2017 where the issue regarding the Cenvat credit during transitional issues arising with respect to payment of service tax after 30th June 2017. The circular squarely allows the benefit of credit claimed by the appellant.
Facts
The the demand has been raised under two different heads. Demand of Rs. 1,07,946/- has been raised on the basis of the mismatch between the Cenvat credit register and the credit taken in the ST-3 returns filed by the appellant. The second demand relates to an amount of Rs. 12,12,894/- taken in the month of June, 2017 on the strength of invoices allegedly issued in July, 2017.
The assessee submitted that they have taken Cenvat credit in their register under the head “input RHB‟ and “input – RCM‟. The head “input RCM‟ denotes Cenvat credit, which is taken under Reverse Charge Mechanism. They have taken Input-RCM (Cenvat credit of contractors bills) in the Cenvat credit register on accrual basis. However in the service tax return the Cenvat credit of “input-RCM‟ is taken on cash basis i.e. after making payment under RCM. They submitted that Cenvat credit taken in the month under head “input-RCM‟ is reflected in the next months ST-3 return and this fact was explained to Service tax Audit Team at the time of Audit and all the returns and document have been provided to them.
The department has picked up data of only the period of October to March, 2016. The entire period from April 2015 to March 2016 is considered it would show that they were availed lower Cenvat credit in ST-3 as compared to the Cenvat credit register.
Conclusion
The tribunal held that the Circular has been totally ignored by the Commissioner (Appeals). Prima facie, the issue seems to be covered by the Circular cited by the appellant, however, for a closure scrutiny with the relevant invoices, the matter needs to be remanded to the original adjudicating authority to examine the issue in the light of the circular afresh.
Case Details
Case Name: M/s Rajasthan Housing Board Division v/s Commissioner (Appeals), Central Excise & CGST, Jaipur
Citation: Service Tax Appeal No. 55387 Of 2023 (Sm)
Judges: Raju, Member (Technical)
Tribunal: CESTAT, New Delhi
Date Of Decision: 08.08.2024
