CESTAT Orders Fresh Verification of BSNL Chennai Telephones’ CENVAT Credit Based on Chartered Accountant’s Certificate [Read Order]

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) observed that the CENVAT credit claimed by BSNL Chennai Telephones required fresh verification and remanded the matter to the adjudicating authority for reconsideration based on a Chartered Accountant’s certificate.

BSNL Chennai Telephones (Mobile Division), the appellant, is a public sector undertaking engaged in providing telecommunication services and registered with the Service Tax Department. During an audit of the appellant’s accounts, it was found that in September 2008, CENVAT credit amounting to Rs. 82,26,311 had been taken without proper documentation.

A show-cause notice was issued on 27 July 2010 demanding recovery of the credit along with interest and penalty. After adjudication, the Commissioner of Service Tax confirmed a revised demand of Rs. 77,43,085 and appropriated Rs. 4,40,115 already paid by the appellant. No penalty was imposed. Aggrieved by the order, the appellant approached the CESTAT.

The appellant’s counsel argued that the credit was taken based on documents, though the supporting records had gone missing. The counsel submitted that the appellant had now obtained a Chartered Accountant’s certificate dated 28 October 2025, which certified the service tax amount involved and the corresponding credit availed.

The counsel requested that the matter be remanded to the adjudicating authority to verify the correctness of the certificate and related records.

The department’s representative argued that the matter could be remanded to the adjudicating authority for fresh examination after considering the Chartered Accountant’s certificate and any additional evidence that the appellant might produce.

The two-member bench comprising M. Ajit Kumar (Technical Member) and Ajayan T.V. (Judicial Member) pointed out that since the appellant is a public sector unit, an opportunity should be given to verify the evidence and examine the claim afresh.

The tribunal explained that the adjudicating authority should review the issue after considering the Chartered Accountant’s certificate and any other written or oral submissions made by the appellant.

The tribunal set aside the impugned order and remanded the matter to the adjudicating authority for fresh adjudication, directing that the proceedings be completed within ninety days of the order.

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