2011 (4) TMI 852 - AT - Service Tax

Cenavat credit - Cable Operator, Security Service, Mandap Keeper and Tour Operator Services - Held that - As assessees state that Security Services were availed for the purpose of provision of security to their factory premises, that Mandap Keeper Services were availed for the purpose of holding business convention and that Rent-a-Cab Services were availed for the purpose of ferrying the employees to and from the factory, none of these details are available in the reply to the show-cause notice and hence not reflected either in the adjudication orders or in the impugned orders - Interests of justice require that the impugned orders be set aside and the cases remitted to the adjudicating authority for fresh decision - The appeals are thus allowed by way of remand.

Summary

Issues:
- Admissibility of credit of service tax on various services like Cable Operator, Security Service, Mandap Keeper, and Tour Operator Services.
- Requirement of nexus with the business of manufacture of final products for credit eligibility.

Analysis:
The judgment deals with the issue of admissibility of credit of service tax on services like Cable Operator, Security Service, Mandap Keeper, and Tour Operator Services. The Revenue challenged the orders of the Commissioner of Central Excise (Appeals) extending such credit for the period from Feb. - 05 to Feb. -06. The Hon'ble Tribunal noted that the legal position currently mandates that credit is permissible only if the services are connected to the business of manufacturing final products, citing the decision of the Hon'ble Bombay High Court in Commissioner of Central Excise, Nagpur Vs Ultratech Cement Ltd. The Tribunal observed that the details regarding the purpose of availing Security Services, Mandap Keeper Services, and Rent-a-Cab Services were not provided in the response to the show-cause notice, leading to their absence in the adjudication and impugned orders. Therefore, in the interest of justice, the impugned orders were set aside, and the cases were remitted to the adjudicating authority for a fresh decision considering the legal position and providing the assessees with a reasonable opportunity to establish the purpose of availing the services. The Tribunal directed that fresh orders be passed after granting the assessees a fair chance to present their defense. Consequently, the appeals were allowed by way of remand.

This judgment underscores the significance of establishing a nexus between availed services and the business of manufacturing final products for the admissibility of credit of service tax. It highlights the necessity for assessees to provide explicit details regarding the purpose of availing services to ensure a fair adjudication process. The decision emphasizes the principles of natural justice by granting the assessees a reasonable opportunity to present their case and defend their position before a fresh decision is made. The Tribunal's ruling reflects a commitment to upholding legal standards and ensuring a just and equitable resolution in matters concerning the admissibility of service tax credit.