2011 (2) TMI 1147 - AT - Service Tax

Cenvat credit - HR plate/coil, jointing sheet & M.S. Stud and welding electrodes used for maintenance and repair of plant and machinery - Held that - As decided in Ambuja Cements (2010 (4) TMI 429 - CHHAITISGARH HIGH COURT), Hindustan Zinc Ltd. (2008 (7) TMI 55 - HIGH COURT RAJASTHAN) and Alfred Herbert (India) Ltd. (2010 (4) TMI 424 - KARNATAKA HIGH COURT) welding electrodes other items used for repair and maintenance of plant and machinery would be eligible for cenvat credit. Rent a cab service for hiring vehicle used by the company - Held that - As regards rent a cab service, the same has been used for various activities of the appellants including procurement of inputs and hence the same is covered by the definition of the input service , in view of the judgment J.K. Cement Works 2009 (1) TMI 146 - CESTAT NEW DELHI Service of maintenance and repair and mobile telephone service - Held that - it is not disputed that the mobile phones are used by the company official for the company work. Hence mobile phone service has to be treated as input service. See ITC Ltd. 2009 (1) TMI 192 - CESTAT, CHENNAI GTA service - credit was taken at the end of the month, payment to service provider was made for the service tax was paid only on the fifth of the month, the credit could not be taken on or before the date on which the service tax has been paid - Held that - As it is not denied that the service tax has been paid and hence there is gap of only five days between the date of taking credit and payment of service tax. Since the lapse is only of technical nature, it would not be correct to deny the credit. Therefore, denial of credit in respect of GTA service is not sustainable. In favour of assessee.

Summary

Issues Involved:
1. Eligibility of HR plate/coil, jointing sheet & M.S. Stud and welding electrodes for cenvat credit as capital goods or inputs.
2. Inclusion of rent a cab service, maintenance and repair service, and mobile telephone service under "Input service" for cenvat credit.
3. Cenvat credit of service tax paid on GTA service received by the appellant.

Analysis:

Issue 1:
The first issue revolves around whether HR plate/coil, jointing sheet & M.S. Stud and welding electrodes used for repair and maintenance of plant and machinery are eligible for cenvat credit as capital goods or inputs. The appellant cited judgments from various High Courts supporting the eligibility of such items for credit. The Tribunal concurred with the High Court decisions, emphasizing that items used for repair and maintenance are indeed eligible for credit. Consequently, the Commissioner (Appeals) order denying the credit was deemed unsustainable.

Issue 2:
Regarding the second issue, the Tribunal deliberated on the eligibility of rent a cab service, maintenance and repair service, and mobile telephone service under the definition of "Input service" for cenvat credit. The appellant argued that these services are integral to their business activities and should qualify for credit. Citing precedents and judgments, the Tribunal agreed with the appellant's stance, asserting that these services fall within the ambit of "input service." Consequently, the Commissioner (Appeals) decision to deny credit for these services was overturned.

Issue 3:
The final issue pertains to the cenvat credit of the service tax paid on GTA service received by the appellant. The department contended that a technical discrepancy in the timing of credit and payment rendered the credit unsustainable. However, the Tribunal reasoned that since the service tax had been paid, the minor gap in timing should not preclude the appellant from availing the credit. As a result, the denial of credit for GTA service was deemed unsustainable, and the appellant's appeal was allowed with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant on all three issues, setting aside the Commissioner (Appeals) order and allowing the appellant to avail the cenvat credit for the disputed items and services.