2013 (10) TMI 661 - AT - Central Excise

CENVAT Credit - Eligibility to avail CENVAT Credit of Service Tax paid by the telephone service provider of the landlines which are installed at the residence of employee Held that - There was no reason to deny such credit to the assessee, as the employees in whose residences the telephone lines are installed are undisputedly were working employees of the assessee - Following M/s SEMCO ELECTRIC PVT LTD (UNIT-II) Versus COMMISSIONER OF CENTRAL EXCISE, PUNE-I 2011 (6) TMI 238 - CESTAT, MUMBAI and H. E. G. LTD. Versus COMMISSIONER OF C. EX., RAIPUR 2010 (10) TMI 357 - CESTAT, NEW DELHI - the order denying the CENVAT Credit to the appellant is unsustainable and liable to be set aside Order set aside Decided in favour of Assessee.

Summary

Issues involved:
1. Eligibility to avail CENVAT Credit of Service Tax paid by the telephone service provider for landlines installed in employees' residences.

Analysis:
The judgment by Mr. M.V. Ravindran of the Appellate Tribunal CESTAT Ahmedabad pertains to a Stay Petition where the issue at hand was the eligibility of the appellant to avail CENVAT Credit for Service Tax paid by the telephone service provider for landlines installed in employees' residences. The tribunal found that the issue was narrow and could be resolved promptly. The appellant sought a waiver of pre-deposit, which was allowed, and the appeal was taken up for disposal.

Upon reviewing the submissions from both sides, the tribunal considered the crucial issue of whether the appellant was entitled to CENVAT Credit for the Service Tax paid by the telephone service provider for landlines installed in employees' residences. The appellant argued that since the landlines were installed in the residences of working employees, they should be eligible for the credit. The tribunal referenced previous decisions in similar cases, such as Semco Electric Pvt. Ltd. and H.E.G. Ltd., where it was established that if the employees in whose residences the telephone lines were installed were working for the appellant, then the CENVAT Credit should be allowed.

Based on the precedents and the facts of the case, the tribunal concluded that the impugned order denying the CENVAT Credit to the appellant was unsustainable. Therefore, the tribunal set aside the impugned order and allowed the appeal. This judgment highlights the importance of considering the employment status of individuals in determining the eligibility for CENVAT Credit in cases involving services provided to employees' residences.