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2010 (5) TMI 803 - AT - Service TaxCENVAT credit - input services - advertisements for aerated waters - Held that - the services in respect of which CENVAT credit was taken by the assessee during the period of dispute are within the ambit of the definition of input service given under Rule 2(l) of the CENVAT Credit Rules 2004 and consequently the demand raised on them by the lower authority by way of denial of input service tax credit has to be set aside - penalty also set aside - appeal allowed - decided in favor of appellant.
Issues:
Appeal against Order-in-Original confirming duty demand and penalty imposition based on earlier Tribunal decision. Tribunal's decision challenged citing High Court judgment on input services definition under CENVAT Credit Rules. Analysis: The appeal was filed against Order-in-Original No. 42/2007 confirming duty demand and penalty on the appellant. The Commissioner based the decision on a previous Tribunal ruling in Appeal No. E/2929/2006. However, the appellant argued that the Tribunal's decision was overturned by the Hon'ble High Court in a case involving similar questions of law regarding input services for advertising and marketing of aerated waters. The High Court judgment in Coca Cola India Pvt. Ltd v. Commissioner clarified the definition of 'input services' under Rule 2(l) of the CENVAT Credit Rules, 2004. The questions of law framed by the High Court were answered in favor of the assessee, establishing that services for which CENVAT credit was claimed fell within the ambit of 'input service.' Consequently, the demand raised by the lower authority, denying input service tax credit, was deemed unjustified. Given the similarity of issues with the previous case, the Tribunal held that the services in dispute during the relevant period were indeed covered under the definition of 'input service.' Therefore, the demand for duty and penalty imposed by the Commissioner was set aside. The Tribunal emphasized the necessity to vacate the penalty as well, in line with the decision on the demand. In conclusion, the Commissioner's order was overturned, and the appeal was allowed in favor of the appellant. The Tribunal's decision was guided by the High Court judgment, which clarified the scope of 'input services' under the CENVAT Credit Rules, leading to the dismissal of the duty demand and penalty imposed on the appellant.
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