2013 (8) TMI 713 - AT - Service Tax

Cenvat credit on Rent-a-Cab Services - CENVAT credit on Outdoor Catering Services - The assesse was a business process outsourcing unit substantially exporting their output services - Revenue was of the view that they were not eligible for such credit in respect of many of the input services on which they had taken Cenvat credit - Held that - Confirmation was not justified in the absence of any material to doubt the veracity of the facts affirmed by applicant - Commissioner had also concurred in principle that credit of tax paid on these services were eligible - But he had gone ahead to confirm the demand stating that no documents had been produced Following STANZEN TOYOTETSU INDIA PVT. LTD. Versus COMMR. OF C. EX., BANGALORE-III 2008 (12) TMI 118 - CESTAT BANGLORE and CCE, Nagpur Versus Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT - Revenue had no evidence to prove anything contrary to their claim and they had not taken any credit - They had no idea as to what type of documents would have convinced the adjudicating authority about the absence of a fact. Waiver of Pre-deposit - No pre-deposit could be demanded - but on Credit availed on the basis of invoices raised by vendors said to be not registered court directed the pre-deposit conditional Stay Granted.

Summary

Issues Involved:
Cenvat credit eligibility on various input services including rent-a-cab, outdoor catering, insurance, air travel agent services, and vendor registration with Service Tax Authorities; demand of service tax on reimbursements; differential interest on delayed payments.

Analysis:

1. Cenvat Credit Eligibility on Input Services:
The applicant, a business process outsourcing unit, had taken Cenvat credit on various input services. The dispute revolved around the eligibility of Cenvat credit on services like rent-a-cab, outdoor catering, insurance, air travel agent services, and vendor registration with Service Tax Authorities. The Revenue contended that the applicant was not entitled to credit on certain services. The counsel for the applicant argued that they had not recovered any amounts from employees for rent-a-cab and outdoor catering services, and the adjudicating authority lacked evidence to disprove this claim. The Tribunal found in favor of the applicant on rent-a-cab and outdoor catering services based on precedents and the lack of material to doubt the applicant's assertions.

2. Demand of Service Tax on Reimbursements:
A significant amount of service tax demand related to reimbursements claimed by the applicant for travel expenses of their employees. The counsel cited a decision by the Hon. Delhi High Court to support their contention that service tax should not be levied on such reimbursements. The Tribunal considered this argument and directed the applicant to deposit a specific amount pending further proceedings, indicating a nuanced approach to this issue.

3. Differential Interest on Delayed Payments:
The issue of differential interest on delayed payments was also raised. The Tribunal noted a nominal amount in this regard and decided on the pre-deposit requirement accordingly. The Tribunal's decision reflected a balanced consideration of the arguments presented by both parties.

Conclusion:
In conclusion, the judgment by the Appellate Tribunal CESTAT CHENNAI addressed various issues concerning Cenvat credit eligibility on input services, demand of service tax on reimbursements, and differential interest on delayed payments. The Tribunal's analysis was thorough, considering legal precedents, evidentiary requirements, and relevant legal principles to arrive at a reasoned decision on each issue. The detailed examination of the facts and legal arguments showcased a judicious approach to resolving the disputes presented in the case.