2012 (9) TMI 412 - Commissioner - Service Tax

Denial of Cenvat Credit - invoice relating to Insurance and Repairs of Motor Cars alleged that invoices are in the name of Ms. Varsha P. Jain, the Proprietix of M/s. Creative Architects and Interiors and not in the name of the firm Held that - Architect certificate is in the name of Proprietrix, viz., Varsha Pramod Jain and still appellant is paying the service tax for service rendered by it under the name of Creative Architects & Interiors - appellant had also produced copy of the Registration Certificate issued by the Council of Architecture and Service tax Registration Certificate (ST-2) issued by the Department - M/s. Creative Architects and Interiors is a proprietary concern of Ms. Varsha P. Jain and the concern and the Proprietix are legally one and the same - Credit of Service tax cannot be denied just because the invoice is in the name of the Proprietix Denial of the Cenvat Credit on Airtel Bills by assigning the reason that the other person whose name find place in the Invoice of Airtel Bills could have availed the credit Held that - They have availed group scheme to cut cost and therefore Airtel always raises bills in the name of all people involved in the Group Scheme even if the bill relates to one of the Group Member -other group of company namely M/s. Creative Consultants has not availed the Credit of Service tax and submitted documentary proof in their support credit available

Summary

Issues:
1. Liability to pay service tax on money received from SCL
2. Eligibility for Cenvat credit on service tax paid on mobile phone and vehicle maintenance

Analysis:

Issue 1: Liability to pay service tax on money received from SCL
The appellant argued that the amount received from Sethusamudram Corporation Ltd. (SCL) was a prize money for participating in a competition organized by SCL, and hence no service tax was payable. They contended that there was no service provider-receiver relationship in this case. The appellant provided the Request For Proposal (RFP) from SCL, which indicated that the competition was for architectural designs, and the best design would be awarded honorarium by a Board of Assessors. The judge agreed with the appellant, stating that there was no contract between the competitors and SCL, and no service was provided. Therefore, the demand for service tax on the amount received from SCL was deemed unsustainable, and the judge set it aside.

Issue 2: Eligibility for Cenvat credit on service tax paid on mobile phone and vehicle maintenance
The Lower Authority had denied Cenvat Credit on certain invoices, citing reasons such as lack of signature on an invoice from Moster.Com and invoices being in the name of the proprietor rather than the firm. The appellant provided evidence to support their claim for Cenvat credit, including documents showing the connection between the proprietor and the firm. The judge ruled in favor of the appellant, allowing the Cenvat credit on the disputed invoices. The judge also accepted the appellant's explanation regarding group schemes for Airtel bills, leading to the decision to grant Cenvat credit in that regard as well. Consequently, the impugned order was set aside, and the appeal was allowed.