2016 (11) TMI 1479 - AT - Central Excise

CENVAT credit - various input services - common except expenditure incurred on PF/EPF collection and telephone installed at residential complex - Held that - the denial of cenvat credit along with interest, except telephone services installed at the residences of senior executives and PF/ESI data collection/compilation service, is set aside. Penalty - Held that - As the issue involved in this case is of interpretation of eligibility of cenvat credit, imposition of penalty is unwarranted. Appeal allowed in part.

Summary

Issues: Appeal against dismissal of cenvat credit on input services availed by the appellant, imposition of penalty under Cenvat Credit Rules, 2004.

Analysis:
1. The appellant, a Public Limited Company, filed an appeal against the dismissal of cenvat credit on various input services availed by them. The lower authority had raised objections on the cenvat credit of service tax availed by the appellant on multiple input services.
2. A Show-Cause Notice was issued, and after due process, a demand totaling to ?3,83,491 was confirmed along with interest and a penalty of ?10,000 under Rule 15(3) of Cenvat Credit Rules, 2004. The lower appellate authority upheld the Order-in-Original, leading to the present appeal.
3. The appellant's Counsel submitted an Order of the Tribunal in a similar case where the matter was remanded for a fresh order, resulting in a favorable decision for the appellant. The Counsel also presented a de novo order wherein cenvat credit on all services as eligible input services was deemed admissible.
4. The Counsel for the Revenue reiterated the findings of the lower appellate authority.
5. After hearing both sides and examining the appeal records, the Tribunal noted a previous order where a similar issue was remanded for proper verification and judicial precedence. The Tribunal found that all services, except for residence telephone service and PF/EPF collection service, were covered by decisions in favor of the appellant.
6. The Tribunal concluded that the denial of cenvat credit, except for telephone services at senior executives' residences and PF/ESI data collection service, was not justified. As the issue revolved around the interpretation of cenvat credit eligibility, the imposition of a penalty was deemed unwarranted.
7. Consequently, the Tribunal set aside the denial of cenvat credit on most services, except for specific cases, and partially allowed the appeal in favor of the appellant.

This detailed analysis highlights the legal proceedings and the Tribunal's decision regarding the cenvat credit on input services, emphasizing the interpretation of eligibility criteria and the imposition of penalties under the Cenvat Credit Rules, 2004.