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2015 (3) TMI 1114 - AT - Service TaxCenvat Credit - SEZ unit - Eligible input services - The lower authorities are of the view that the said services on which CENVAT Credit was availed is not eligible to the appellant as the said services were not used for export of services. - Held that - As regard availment of CENVAT Credit of service tax paid on Health Club and Fitness Centre , vide our final order dated 20.06.2013, we held that these services are not eligible for availing CENVAT Credit. Accordingly, the demands confirmed by the lower authorities on this services are liable to be upheld along with interest. We have no hesitation to hold that the appellant has correctly availed the CENVAT Credit of the service tax paid by various service providers except Health Club and Fitness Centre Services . Adjudicating authority has erred in confirming the demand despite there being calculation errors. In short, we find that the appellant has made out a case for him as to eligibility of CENVAT Credit availed on various services as indicated here-in above except for Health Club and Fitness Services , and hold that they, have correctly availed CENVAT Credit and the appeal to that extent needs to be allowed and we do so. - Decided partly in favor of assessee.
Issues:
1. Eligibility of CENVAT Credit on various input services. 2. Calculation errors in the demand confirmation. 3. Adherence to remand directions by the adjudicating authority. 4. Imposition of penalties. Detailed Analysis: 1. Eligibility of CENVAT Credit on Various Input Services: The appellant, engaged in providing Information Technology, Software Services, Business Process Outsourcing, and Consulting Services, availed CENVAT Credit on multiple input services from April 2006 to September 2011. The lower authorities disputed the eligibility of these credits, arguing that the services were not used for the export of services. The services in question included Transport of Passengers by Air, Event Management, Mandap Keeper, Accommodation, Insurance, and others. The Tribunal found that the appellant provided sufficient documentary evidence to substantiate the use of these services in their business activities. For instance, the service tax paid on air travel was linked to employees' business trips, and Event Management and Mandap Keeper services were used for business meetings and training programs. The Tribunal upheld the eligibility of CENVAT Credit for all services except Health Club and Fitness Centre Services, which were deemed unrelated to business activities. 2. Calculation Errors in the Demand Confirmation: The appellant contested the demand on the grounds of calculation errors. They highlighted discrepancies in the figures used by the adjudicating authority, including mismatches between the actual credit availed and the amounts demanded/confirmed. The Tribunal acknowledged these errors, noting that approximately Rs. 5.02 crores were wrongly confirmed despite being allowed in previous orders. The Tribunal also found merit in the appellant's claim regarding an incorrect demand of Rs. 1.64 crores, which should have been around Rs. 2.23 lakhs. Consequently, the Tribunal adjusted the demand figures accordingly. 3. Adherence to Remand Directions by the Adjudicating Authority: The Tribunal had previously remanded the matter with specific directions to examine the eligibility of CENVAT Credit based on documentary evidence. However, the adjudicating authority failed to adhere to these directions, summarily dismissing the appellant's claims without proper examination. The Tribunal reiterated its earlier position that the services in question had a nexus with the appellant's business activities and criticized the adjudicating authority for not following the remand instructions. 4. Imposition of Penalties: Given the nature of the dispute, which involved the interpretation of provisions related to CENVAT Credit eligibility, the Tribunal found no justification for imposing penalties on the appellant. The Tribunal set aside the penalties, emphasizing that the issue was primarily about the correct interpretation of the law rather than any deliberate wrongdoing by the appellant. Conclusion: The Tribunal allowed the appeal in favor of the appellant, confirming the eligibility of CENVAT Credit for most of the disputed services except Health Club and Fitness Centre Services. The Tribunal also corrected the calculation errors and set aside the penalties, directing the adjudicating authority to adhere to the remand directions and properly examine the documentary evidence. The appeal was disposed of accordingly.
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