2015 (3) TMI 1058 - AT - Service Tax

Cenvat credit of Service Tax - C&F agent service, commission agent service and erection, installation and commissioning service - Held that - Since the issues are covered by the precedent decision of the Tribunal and both sides agree by following the precedent decision, the service tax credit taken by the appellant in respect of C&F agent service is held as correctly taken and the demand is set aside. As regards the commission agent, the credit is held inadmissible and payable, if already taken, with interest. Since till the decision of the Hon ble High Court of Gujarat rendered in the case of Cadila Health Care Ltd. 2013 (1) TMI 304 - GUJARAT HIGH COURT , there were decisions taking a view that credit is admissible, I consider that penalty need not be imposed in this case. As regards the amount of ₹ 76,000/- taken as Cenvat credit on erection, installation and commissioning service, the grievance of the Revenue is only that the Commissioner has not recorded any discussion and simply concluded that appellant is eligible. I find this grievance to be valid - credit taken on C&F agent service is held eligible, credit taken in respect of commission agent is held as not correct and the demand for the credit with interest is upheld. As regards the 3rd item, erection, installation and commissioning service, the matter is remanded to the Commissioner (Appeals) to discuss the issue properly and thoroughly and pass a well reasoned order - Decided partly in favour of assessee.

Summary

Issues involved: Eligibility of the appellants for Cenvat credit of Service Tax paid on C&F agent service, commission agent service, and erection, installation, and commissioning service.

Analysis:
1. C&F Agent Service: The Tribunal referred to a previous decision where it was held that the appellant is eligible for Cenvat credit for C&F agent service. Both parties agreed to follow this precedent, leading to the conclusion that the service tax credit for C&F agent service was correctly taken, and the demand was set aside.

2. Commission Agent Service: In contrast to the C&F agent service, it was determined that the appellant is not eligible for Cenvat credit for commission agent service. The Tribunal noted that until a specific decision by the Hon'ble High Court of Gujarat, there were differing views on the admissibility of the credit. As a result, the credit for commission agent service was deemed inadmissible and payable with interest if already taken.

3. Erection, Installation, and Commissioning Service: The Revenue raised a concern that the Commissioner did not provide a detailed discussion before concluding that the appellant was eligible for Cenvat credit on this service. The Tribunal found this grievance to be valid and remanded the matter to the Commissioner (Appeals) for a thorough discussion and a well-reasoned order.

In conclusion, the Tribunal held that the credit taken for C&F agent service was eligible, the credit for commission agent service was not correct and the demand for credit with interest was upheld, and the matter regarding the erection, installation, and commissioning service was remanded for further discussion. The appeal was decided accordingly.