Willful Misstatement/Suppression cannot be Alleged based on Documents available with the Dept: Calcutta HC allows Service Tax Credit [Read Order]

A division bench of the Calcutta High Court, while allowing a claim of cenvat credit, has held that the willful misstatement or suppression cannot be alleged based on documents available with the department.

The respondent/assessee, M/s Surya Vistacom Private Limited, was issued a show cause notice alleging that they have availed and utilized Cenvat Credit of the amount of service tax paid by them against renting of immovable property and security services on the ground that they are recipient of the said services. The assessing officer referred to Rule 6(2) of the Cenvat Credit Rules where a provider of output service avails Cenvat Credit on input/input services and provides output services which are chargeable to tax as well as exempted services, then, the provider of output service shall maintain separate accounts for receipt and use of input/input services.

Justice T.S. Sivagnanam and Justice Bivas Pattanayak observed that there is no specific allegation or prima facie finding of any wilful misstatement or suppression on the part of the assessee.

Diving deeply into the facts of the case, the bench observed that “The tribunal pointed out that the audit department had issued final audit report from which it is seen that the audit report was issued on 24th October, 2016 whereas the order-inoriginal was passed much later i.e., on 31st January, 2017 and the tribunal also noted that the audit report was placed before the adjudicating authority. However, the same has been ignored.”

“That apart, the details have been culled out by the adjudicating authority from the available records and there are no new or fresh tangible materials available in the hands of the adjudicating authority to make out a case of wilful misstatement or wilful suppression. Therefore, the tribunal was fully justified in holding that the extended period of limitation could not have been invoked,” the Court said.

To Read the full text of the Order CLICK HERE

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