CESTAT Kolkata Dismisses Revenue's Appeal Seeking Reversal Of Allahabad Bank's ₹20 Crore CENVAT Credit

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the dropping of a service tax demand of nearly ₹20 crore against Allahabad Bank.

It held that the bank had paid the service tax before availing CENVAT credit, even though the corresponding invoices were issued later.

A bench of Judicial Member Ashok Jindal and Technical Member K. Anpazhakan dismissed the Revenue's appeal after examining the invoices and remittance records.

The tribunal observed,"The respondent paid the Service Tax and thereafter have availed the CENVAT Credit thereon. In these circumstances, we hold that the ld. adjudicating authority has rightly dropped the demand raised against the respondent for the invoices in question."

The dispute concerned CENVAT credit claimed by Allahabad Bank on service tax paid towards deposit insurance services provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

The Revenue contended that the bank had availed the credit before three invoices dated April 11, 2012, September 20, 2012 and December 6, 2012 were issued.

After examining the records, the tribunal found that the service tax had been remitted on November 28, 2011, May 28, 2012 and November 29, 2012 respectively. Each payment was made before the corresponding invoice was issued.

The tribunal observed, "This shows that the respondent has paid the entire amount of Service Tax thereon prior to issuance of the said invoices. Therefore, as the respondent paid the Service Tax and thereafter have availed the CENVAT Credit thereon, we hold that the ld. adjudicating authority has rightly dropped the demand raised against the respondent for the invoices in question."

Finding no infirmity in the adjudicating authority's order, the tribunal upheld it. It consequently dismissed the Revenue's appeal.

For Appellant (Revenue): Shri Debapriya Sue, Authorized Representative