2011 (1) TMI 590 - AT - Service Tax

Eligibility to avail Cenvat Credit - Limitation - Service tax paid by the service tax provider on mobile phones which were used by the staff - The contention of the revenue is that the amount of bill of the cell phones used by the employees is paid by the employees themselves - At the same time the contention of the ld. Counsel that the amount has been reimbursed has not been rebutted in anywhere in the records - it is observed that no evidence was available on record to substantiate the above claims of the department - Further the appellants are not required under law to furnish the details of cell/mobile phones on which they had availed the input service credit as alleged by the department which by no stretch of imagination can be averred as suppression of facts which necessitates invoking proviso to section 11A of the Central Excise Act - It is for the department to decipher and analyse the details of credit availed by the appellants in the monthly returns furnished to the department - Hence the demand is clearly time barred. In any case input service credit is available to fixed telephone and mobile telephones given to the employees of a unit in the light of decision of Hon ble Tribunal in the case of M/s. Keltech Energies Ltd. v. CCE 2008 -TMI - 4051 - CESTAT BANGALORE - Decided in favour of assessee.

Summary

Issues involved:
Eligibility of Cenvat Credit on service tax paid for mobile phones used by employees, time bar on demand, suppression of facts in monthly returns.

Analysis:

Eligibility of Cenvat Credit:
The appeal involved the eligibility of the respondent to avail Cenvat Credit on service tax paid for mobile phones used by employees. The revenue argued that since the mobile phones were registered in the employees' names and the bills were paid by the employees, the credit availed by the respondent was incorrect. However, the respondent contended that the amounts paid by employees were reimbursed by the company. The Commissioner(Appeals) ruled in favor of the respondents on the limitation issue. The judgment highlighted that the revenue failed to provide evidence of suppression of facts by the respondents. The order was deemed correct, legal, and without any infirmity, leading to the rejection of the Revenue's appeal.

Time Bar on Demand:
The issue of time bar on the demand was crucial in this case. The Commissioner(Appeals) set aside the Order-in-Original on both merits and time bar. It was argued that the show-cause notice was time-barred, and the Commissioner(Appeals) ruled in favor of the respondents on this aspect. The judgment emphasized that the demand was considered time-barred due to lack of evidence of suppression of facts by the respondents in their monthly returns. The order was upheld based on the absence of contrary evidence supporting the revenue's claim of suppression.

Suppression of Facts in Monthly Returns:
The case also revolved around the allegation of suppression of facts in the monthly returns submitted by the respondents. The revenue contended that the respondents did not mention details of the cell phones for which they availed input service credit in their returns, implying suppression of facts. However, the judgment highlighted that there was no evidence available to substantiate the department's claim of suppression. The Commissioner(Appeals) held that the appellants were not required by law to furnish such details in their returns. The order emphasized that it was the department's responsibility to analyze the credit details in the returns. As a result, the demand was deemed time-barred, and the appeal filed by the Revenue was rejected based on the lack of evidence supporting the claim of suppression of facts.

This comprehensive analysis of the judgment showcases the intricate legal issues surrounding the eligibility of Cenvat Credit, time bar on demand, and suppression of facts in the context of the case.