2014 (2) TMI 1310 - AT - Service Tax

CENVAT credit - air travel service - tour operator service - rent-a-cab service - Revenue has entertained a view that appellant should not have availed CENVAT credit since they were claiming abatement of 60% in respect of rent-a-cab service and 90% in respect of tour operator service - Held that - the fact remains that the Commissioner has not verified the documents submitted even though he mentioned that he has taken note of the written additional submissions - instead of granting stay and postponing the final decision, it would appropriate to remand the matter to the Commissioner for the purpose of verifying whether the appellants have reversed the proportionate credit - appeal allowed by way of remand.

Summary

Issues:
1. Availment of CENVAT credit by the appellant for rent-a-cab and tour operator services.
2. Dispute regarding the reversal of proportionate credit and eligibility for abatement.
3. Commissioner's observation of lack of evidence on credit reversal.
4. Decision to remand the matter for verification by the Commissioner.

Analysis:

The appellant, engaged in air travel, tour operator, and rent-a-cab services, faced a dispute over the availing of CENVAT credit due to claimed abatements of 60% and 90% for rent-a-cab and tour operator services, respectively. The appellant contended that they were reversing proportionate credit monthly based on service turnover, citing a Tribunal decision. However, the Commissioner noted a lack of evidence on credit reversal, despite the appellant submitting documents acknowledged by the Commissioner's office. The Tribunal found the issue prima facie covered by its decision but decided to remand the matter to the Commissioner for verification.

The Tribunal, instead of granting a stay, directed the matter to be remanded for the Commissioner to verify if the appellant had indeed reversed the proportionate credit. The Commissioner was instructed to extend the benefit of the Tribunal decision if applicable after verification. The appellant was to be given a reasonable opportunity to present their case, and the Commissioner could consider other relevant decisions. The stay application and appeal were disposed of under these terms, emphasizing the need for proper verification by the Commissioner before making a final decision.