2012 (12) TMI 824 - AT - Service Tax

Stay petition - Input service distributor Cenvat Credit GTA service - Credit was distributed by issuing invoices as ISD by branch sales office to plants ST -3 - Required returns in this regard as ISD was not filed - Commissioner confirming the cenvat credit demand with interest - Impose penalty of equal amount - Rule 15 of the Cenvat Credit Rules, 2004 Held that - the cenvat credit cannot be denied, more so, when the appellant s contention that SAIL (BSO) during that period of dispute, were filing the ST-3 Returns in which their transactions as input service distributor were also reflected, have not been disputed by the department Cenvat credit - Rent-a-cab service Input service for bringing the workers to the steel plant and dropping them back Held that - This service is covered by the definition of input service and hence the cenvat credit of service tax paid in respect of the same would be admissible Appellants have strong prima facie case in their favour. Stay Granted

Summary

Issues:
1. Disallowance of cenvat credit by the Commissioner on the ground of non-filing of required returns by the service producer.
2. Dispute regarding the admissibility of cenvat credit on rent-a-cab service and GTA services availed by the appellant.
3. Imposition of penalty and interest on the disallowed cenvat credit.
4. Appeal against the order of the Commissioner by the appellant.

Analysis:
The case involved a dispute over the disallowance of cenvat credit amounting to Rs.20,18,168/- by the Commissioner, primarily due to the non-filing of required returns by the Branch Sales Office (BSO) of a company acting as a service producer. The disallowed credit included amounts for rent-a-cab service and GTA services. The appellant argued that the cenvat credit for the rent-a-cab service was admissible based on relevant court judgments and Tribunal decisions. They contended that the disallowed credit for GTA services, issued by the BSO as an input service distributor, should not be denied solely due to the non-filing of returns during the disputed period. The appellant requested a waiver of pre-deposit for the cenvat credit demand, interest, and penalty.

Upon hearing both parties, the Tribunal considered the arguments presented. Regarding the rent-a-cab service, the Tribunal found that it fell within the definition of 'input service,' making the cenvat credit admissible based on legal precedents cited by the appellant. Concerning the GTA services, availed by the appellant through invoices issued by the BSO as an input service distributor, the Tribunal noted that the sole ground for denial was the non-filing of returns by the BSO during the disputed period. However, since the transactions were reflected in the ST-3 Returns filed by the BSO, the Tribunal held that the denial of cenvat credit solely on this ground was not justified. The Tribunal observed that the appellant had a strong prima facie case in their favor, leading to the waiver of the pre-deposit requirement for the cenvat credit demand, interest, and penalty. Consequently, the stay applications filed by the appellant were allowed, and the recovery of the disputed amounts was stayed pending the final disposal of the appeals.