The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal has held that there was no suppression on the part of assessee but there was negligence on the part of range officer to find out on which services CENVAT was availed.

The bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the Returns do not require invoice-wise details of CENVAT credit nor any justification or explanation about the credit availed on each of the invoices. 

“Once the Return is filed, it is the responsibility of the Range Officer to scrutinize it and for this purpose, he can call for any records and accounts of the assessee. Had this been done, the officer would have found out on which services CENVAT was availed and could have acted on it,” the bench said.

The appellant, M/s Gail Training Institute is an institute of the Gas Authority of India Ltd.5 and is responsible for providing training to the employees of GAIL. It also provides training to other persons for which it charges a fee and such training is “commercial coaching and training”.

The appellant was registered with the Service tax department and has been paying service tax on such service. It has also been availing CENVAT credit on the inputs and input services.

Sometimes, employees of GAIL need to be trained at other institutes and those institutes raise invoices in the name of the appellant along with service tax. The appellant had availed CENVAT credit of the service tax paid on such invoices. Undisputedly, the employees who were trained were not the employees of the appellant but of GAIL and after training, they go back to their respective jobs in GAIL.

The department contended that since the service provided by the other training institutes in training employees of GAIL is not an “input service” for the output services (commercial training and coaching services) provided by the appellant, the appellant had wrongly taken CENVAT credit of the service tax so paid. 

The appellant contended that it was entitled to such CENVAT credit. While this amount formed a large portion of the disputed CENVAT credit, there were also some other services on which the appellant had availed CENVAT credit which are disputed by the Revenue.

The CESTAT stated that the officer did not scrutinize the Returns as the audit did much later and found the alleged irregularities. All that this proves is that the Range officer had not done his job properly and it does not show that the appellant had suppressed anything. Therefore, there is no ground to invoke extended period of limitation at all.

The tribunal partly allowed the appeal by upholding the denial and recovery of CENVAT credit availed on training services within the normal period of limitation with appropriate interest and setting aside the rest of the demand and penalties. The matter is remanded to the Commissioner for the limited purpose of calculation of the CENVAT credit and interest to be recovered.

Case Details

Case Title: M/s Gail Training Institute Versus Commissioner, Central Excise and Service Tax

Case No.: Service Tax Appeal No. 50632 Of 2017

Date: 09.04.2025

Counsel For Appellant: Shagun Arora

Counsel For Respondent: Rajeev Kapoor

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