2010 (8) TMI 200 - AT - Service Tax

CENVAT credit of service tax paid on the input services on CHAs - appellants availed the facility of CENVAT credit of the duty paid on the inputs as well as Service tax paid on the services of CHA for clearance of their import and export consignments and telephone installed in the residence of the executive of the appellants firm - same were denied by the lower authorities holding that these are not admissible as per CENVAT Credit Rules, 2004 - DR agreed that the services on clearing and forwarding CHAs availed by the appellants are eligible for input service credit as it has been allowed by this Tribunal in several cases and the same which has attained finality, but he submitted that the telephone installed at the residence of the Executive of the Company is not entitled for input service credit as clarified in the Board s Circular No. 59/8/03 - Held that - nowhere coming out that the telephone installed at the residence of the Executive are being exclusively used for the business purpose - Board Circular No. 59/8/03 dated 22-6-2003 it is clarified that service tax credit is available for the telephone installed only in the business premises. No input service is available on the telephone installed at the residence of the executive of the appellants - admitted by the learned DR the input service credit on the CHA service is allowed and input service credit on telephone service is denied - appeal is disposed of

Summary

Issues: Denial of CENVAT credit on service tax paid for input services on CHAs and telephone installed in residential premises.

Analysis:
1. The appellants filed an appeal against the denial of CENVAT credit on service tax paid for input services on CHAs and a telephone installed in the residential premises of the Chief Executive of the appellants.

2. The appellants availed CENVAT credit on the duty paid on inputs and service tax paid on CHA services for import and export consignments, as well as the telephone installed in the executive's residence. However, the lower authorities denied the credit citing inadmissibility under the CENVAT Credit Rules, 2004, leading to the appeal.

3. Despite the absence of representation from the appellants, a request was found on record asking to consider the factual position and relevant case laws. The learned DR acknowledged that CENVAT credit for CHA services was eligible based on previous Tribunal decisions, but argued against the credit for the telephone at the executive's residence, referring to a Board Circular.

4. After hearing both sides, the Tribunal observed that the telephone at the executive's residence was not exclusively used for business purposes, as required by the Board Circular. Consequently, the credit for the telephone service was denied, while the credit for CHA services was allowed based on previous Tribunal decisions.

5. The Tribunal disposed of the appeal, confirming the denial of input service credit on the telephone installed in the executive's residence but allowing the credit for CHA services, in line with the arguments presented and the relevant legal provisions.

6. The judgment highlighted the importance of the specific use of services for business purposes in determining the eligibility for CENVAT credit, emphasizing adherence to the Board Circular regarding service tax credit availability only for telephones installed in business premises.