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Dated: 08.03.2025

CESTAT Chandigarh quashed the decision denying CENVAT credit on IGST paid by KPMG

Case Overview

The appeal was filed by M/s KPMG Advisory Services Pvt. Ltd. against the Order-in-Appeal dated 16.02.2023 issued by the Commissioner (Appeals), CGST, Gurugram. The case concerns the eligibility of CENVAT credit on IGST paid in lieu of service tax dues.

Key Issues in the Appeal

1. The Commissioner (Appeals) remanded the case to the original adjudicating authority for verification of the IGST paid by the appellant to clear pending service tax liabilities.
2. The Commissioner (Appeals) denied the admissibility of CENVAT credit on the IGST paid by the appellant.
3. The appellant challenged this decision, arguing that:

• The issue of CENVAT credit denial was not part of the original Show Cause Notice.
• The appellate authority went beyond its jurisdiction by introducing a new issue not originally raised.

Tribunal’s Findings and Decision

1. The Tribunal examined the records and found that the Commissioner (Appeals) exceeded the scope of the Show Cause Notice by introducing a new issue regarding CENVAT credit eligibility.
2. The Tribunal ruled that the denial of CENVAT credit was beyond the scope of the appellate proceedings, as the Commissioner (Appeals) had already framed specific questions regarding the valuation of taxable amounts and service tax liability.
3. The Tribunal set aside the portion of the order denying CENVAT credit but upheld the rest of the Order-in-Appeal.

Final Verdict

• The appeal was partially allowed.
• The Tribunal quashed the decision denying CENVAT credit on IGST paid.
• The rest of the order remained unchanged.

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Source: CESTAT Chandigarh

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