2015 (5) TMI 1008 - AT - Service Tax

Admissibility of Cenvat credit - Consignment agent services - Held that the issue stands decided in favour of the appellant by the Tribunal in 2012 (10) TMI 762 - CESTAT NEW DELHI and 2012 (5) TMI 539 - CESTAT NEW DELHI in the appellant s own case for the previous period. Therefore the Cenvat credit is admissible. Admissibility of Cenvat credit - Telephone installed at the residence of Managing Director and Director of the appellant company - Held that even if the telephone installed at the residence of Managing Director and Director of the appellant company are installed in the name of individual persons the fact remains that it is the appellant company which benefits and as such this service has to be treated as the service in relation to the business of the appellant company. Therefore the Cenvat credit is admissible. - Decided in favour of appellant

Issues:
1. Eligibility for Cenvat credit on service tax paid on commission to consignment agents and telephone charges.
2. Interpretation of "input service" in relation to telephones installed at the residences of Managing Director and Director.
3. Applicability of previous Tribunal judgments on admissibility of Cenvat credit for consignment agent services.
4. Disallowance of Cenvat credit upheld by Commissioner (Appeals).
5. Relevance of the judgment of Bombay High Court in a similar case.

Analysis:
1. The dispute revolves around the eligibility of the appellant for Cenvat credit on service tax paid for commission to consignment agents and telephone charges. The department contended that the telephones were in the name of individual directors at their residences, not the appellant company, leading to the initiation of proceedings for recovery of Cenvat credit. The total credit amount in question was &8377;2,25,727 for the period from Jan. 2005 to March 2009.

2. The main issue addressed was the interpretation of "input service" concerning the telephones installed at the residences of the Managing Director and Director of the appellant company. The department argued that since the telephones were in the names of individual persons, they could not be considered as used in relation to the business of the company. However, the appellant contended that despite the individual names, the company benefited from these services, making them business-related.

3. The appellant relied on previous Tribunal judgments, Final Orders No. 292/2012-SM and No. 524-525/2014-SM, which favored them on the admissibility of Cenvat credit for consignment agent services. This previous favorable decision played a crucial role in the current appeal, as it established a precedent in the appellant's favor.

4. The Commissioner (Appeals) had upheld the disallowance of Cenvat credit, leading to the filing of the current appeal. The appellant argued that the impugned order was incorrect based on the previous Tribunal judgments that ruled in their favor regarding the admissibility of Cenvat credit for consignment agent services.

5. The relevance of the judgment of the Bombay High Court in the case of Manikgarh Cement, as cited by the departmental representative, was dismissed as not applicable to the facts of the present case. The Tribunal concluded that the impugned order disallowing the Cenvat credit for telephone services and consignment agent services was not sustainable based on the arguments presented and the precedents established.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant based on the admissibility of Cenvat credit for consignment agent services and telephone charges, emphasizing the benefit to the appellant company despite the individual names associated with the services.

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