2026-VIL-100-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Cenvat credit fraud, fictitious firms, time-barred demand – Respondents availed Cenvat credit on input service invoices issued by companies that were found to be fictitious entities - The Income Tax department's investigation revealed that these companies were used to generate bogus invoices with fictitious bank accounts and employees acting as proxies. The respondent was unable to prove the genuineness of the input services or the payment of service tax to the government. A demand was raised for recovery of the Cenvat credit along with interest and penalties - Whether the demand relating to the period from 01.04.2006 to 30.09.2006 was time-barred - HELD - The Commissioner (Appeals) erred in holding the demand for the period from 01.04.2006 to 30.09.2006 as time-barred. The respondent had recovered service tax from its clients but failed to deposit the same with the Government, which was recoverable under Section 73A of the Finance Act, 1994. The burden of proof regarding the admissibility of the Cenvat credit was on the respondent, which it had failed to discharge. The fictitious nature of the input service providers had been conclusively established - The Cenvat credit availed by the respondent on the invoices issued by the fictitious firms are not admissible. The respondent has failed to discharge burden by providing any proof of payment of service tax or receipt of the input services. The demand for the period from 01.04.2006 to 30.09.2006 is recoverable from the respondent – The Revenue appeal is allowed
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