2014 (5) TMI 1012 - AT - Central Excise

Benefit of Cenvat credit of Service tax - Revenue denied credit that Services like Telephone Services, Xerox services, Courier services and Insurance services cannot be held as input services - Held that - Telephone Services, Xerox Services, Courier Services and Insurance Services are eligible input services - even if the invoices were received at the Head Quarters and the Services were availed in the factory, the credit cannot be denied - However, demand is also barred by limitation period - Following decision of M/s. Econ Antri Ltd. Vs. CCE, Gwalior 2014 (2) TMI 870 - CESTAT NEW DELHI , M/s. Valco Industries Ltd. 2012 (12) TMI 30 - CESTAT, New Delhi - Decided in favour of assessee.

Summary

Issues involved:
- Eligibility of Cenvat credit on various services
- Invoices issued in the name of Head office but services received in the factory
- Bar of limitation for demanding service tax

Eligibility of Cenvat credit on various services:
The appeal involved a question regarding the eligibility of Cenvat credit for services like Telephone Services, Xerox Services, Courier Services, and Insurance Services. The revenue sought to deny the credit, arguing that these services were not eligible input services. However, referencing the case of M/s. Econ Antri Ltd. Vs. CCE, Gwalior, it was established that these services were indeed eligible input services. The Tribunal's decision in the mentioned case supported the appellant's position on the merits of the case.

Invoices issued in the name of Head office but services received in the factory:
Another issue addressed in the judgment was the discrepancy where the invoices were issued in the name of the Head office, but the services were actually received in the factory. Citing the case of M/s. Valco Industries Ltd., it was clarified that even if the invoices were directed to the Head Quarters and the services were utilized in the factory, the credit could not be denied. This interpretation provided essential support to the appellant's argument regarding the validity of claiming Cenvat credit under such circumstances.

Bar of limitation for demanding service tax:
Furthermore, the judgment considered the contention that the demand for service tax was barred by limitation. It was noted that the credit was availed by reflecting it in the statutory records, indicating no malafide intent on the part of the appellant. Drawing from the Tribunal's decision in the case of M/s. Rainbow Plastic Industries Vs. CCE, Surat, which supported the appellant's stand on limitation, it was concluded that the demand could not be sustained due to the limitation aspect. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant with consequential relief.