2015 (10) TMI 1051 - AT - Service Tax

Disallowance of Cenvat credit - Various services - Held that - Order of the learned Commissioner (Appeals) does not disclose as to examination of the evidence in respect of each of the services availed by the appellant. He simply endorsed the order passed by the learned Adjudicating authority. This is vividly clear when pages 9 and 10 of the appellate order is examined. Such bald order is not accepted by law to be passed by an appellate authority. Therefore, submission of the appellant which is apparent from the order itself depicted in paras 6 and 9 is required to be referred. The appellant had made categorical submission as to how Car Hiring has relevance to the business. It was also explained how Cleaning Service and Sewage Line Maintenance Charges were necessity for protection of its operations. Similarly, relevancy of Security Services was explained. So also the Foreign Travel Service, which was made was to be connected with the manufacture and sale activity. The appellant further explained the Container Fumigation Service, Pallet Fumigation Service as well as Courier Charges which were relevant for its exporting activity. - Matter remanded back - Decided in favour of assessee.

Summary

Issues: Disallowance of Cenvat credit for various services availed

Analysis:

1. Car Hiring Charges, Cleaning Charges, Sewage Line Maintenance Charges, Security Services, Foreign Travel Services, Container Fumigation Service, Pallet Fumigation Service, Courier Charges, and Export Freight: The appellant availed various services which were integrally connected to the output manufactured and ultimately exported. The foreign travel was necessary for procuring orders and ensuring business activities related to exporting brake assembly parts of motor vehicles. The services had a direct nexus to the manufacturing and business activities of the appellant.

2. Order of the Commissioner (Appeals): The order of the Commissioner (Appeals) did not examine the evidence regarding each service availed by the appellant. Instead, the order simply endorsed the decision of the Adjudicating authority without proper scrutiny. This lack of detailed examination is considered a violation of principles of natural justice as it did not consider the appellant's submissions regarding the relevance of each service to their business activities.

3. Principles of Natural Justice: The appellant had made categorical submissions explaining how each service, such as Car Hiring, Cleaning Service, Sewage Line Maintenance Charges, Security Services, Foreign Travel Service, Container Fumigation Service, Pallet Fumigation Service, and Courier Charges, were essential for their manufacturing and exporting activities. The failure to consider these submissions amounted to a violation of natural justice and fairness.

4. Appellate Decision: Considering the appellant's detailed arguments and the clear nexus between the services availed and their business activities, the appeal was allowed to reduce litigation. The Appellate Tribunal found the Cenvatable input services to be relevant and integrated with the manufacturing and sales activities of the appellant. The decision aimed to uphold justice by acknowledging the importance of the services in the appellant's business operations.