2013 (10) TMI 1058 - AT - Service Tax

Eligibility to CENVAT Credit Held that - As regards issue of availability of cenvat credit in respect of invoices received prior to service tax registration Following M/s. Reliance Ports and Terminals Ltd. vs. CCE, Rajkot 2013 (6) TMI 338 - CESTAT AHMEDABAD cenvat credit taken on the invoices received prior to service tax registration, cannot be denied on the ground that the assessee was not registered during the relevant period - The appellant have prima facie a good case in respect of this issue. Housekeeping Service Charges Held that - As regard eligibility of cenvat credit in respect of housekeeping services and hotel service charges provided in the residential colony which is outside the office premises, the issue is arguable in nature and will be decided at the time of regular hearing of the appeal - stay granted partly.

Summary

Issues Involved:
1. Eligibility of cenvat credit on input service prior to service tax registration.
2. Denial of cenvat credit for housekeeping services and hotel charges outside office premises.

Analysis:

Issue 1: Eligibility of cenvat credit on input service prior to service tax registration:
The appellant, M/s. J. P. Kenny Ltd., filed a stay application seeking waiver of pre-deposit and stay against service tax of Rs.6,95,390/- confirmed by the Commissioner of Service Tax, New Delhi. The issue pertains to the eligibility of cenvat credit for service tax paid on input services prior to obtaining service tax registration by the appellant. The Tribunal referred to a previous case, M/s. Reliance Ports and Terminals Ltd. vs. CCE, Rajkot, where it was held that cenvat credit taken on invoices received before service tax registration cannot be denied solely on the ground of non-registration during the relevant period. The Tribunal found that the appellant has a prima facie good case regarding this issue, indicating a favorable stance towards the appellant's eligibility for cenvat credit in this context.

Issue 2: Denial of cenvat credit for housekeeping services and hotel charges outside office premises:
The second issue revolves around the denial of cenvat credit amounting to Rs.47,182/- to the appellant for housekeeping services and hotel service charges provided in a residential colony located outside the office premises. The Tribunal acknowledged that this issue is arguable in nature and decided that it will be addressed during the regular hearing of the appeal. As a directive, the Tribunal instructed the appellant to deposit the aforementioned amount within four weeks. Upon compliance with this directive, the Tribunal ordered a stay on the recovery of the remaining dues until the appeal is disposed of, with a reporting deadline set for August 16, 2013. This decision reflects the Tribunal's cautious approach to the issue, opting to defer a final judgment on the eligibility of cenvat credit for services provided outside the office premises.

In conclusion, the judgment by the Appellate Tribunal CESTAT New Delhi in the case of M/s. J. P. Kenny Ltd. addresses the two main issues of eligibility for cenvat credit on input services prior to service tax registration and the denial of credit for specific services provided outside the office premises. The Tribunal's decision indicates a favorable inclination towards the appellant's eligibility for cenvat credit based on the precedent set in a previous case, while deferring a final decision on the disputed credit for services provided outside the office premises pending further deliberation during the regular hearing of the appeal.