2015 (11) TMI 971 - AT - Service Tax

CENVAT Credit - whether Cenvat credit on the telephone Services, availed at the residences of the senior officers of the appellant, is admissible when such bills are paid by the appellant - Held that - Bill landlines, installed at the residences of the Senior Officers of the appellant, are paid by the appellant. The case law of Monnet Ispat & Energy Ltd vs CCE Raipur (2009 (12) TMI 328 - CESTAT, NEW DELHI), relied upon by the Learned AR, will not help the case of the Revenue as none of the case laws relied upon by the appellant & CBEC clarification were brought to the notice of CESTAT Delhi - appeal is thus required to he decided in favour of the appellant. Secondly as favouble decisions were existing during the relevant period therefore, appellant can not be considered have taken credit with intention to evade. The demand issued to the appellant in these proceedings is thus clearly time barred - Decided in favour of assessee.

Summary

Issues:
Admissibility of Cenvat credit on telephone services availed at the residences of senior officers.

Analysis:
The appeal was filed against the order passed by the first appellate authority, allowing the Revenue's appeal against the Cenvat credit allowed to the appellant on telephone services at senior officers' residences. The appellant argued that the services were related to business activities, citing various case laws in their favor and contending that the extended period could not be invoked.

The appellant referred to CBEC Circular No. 97/8/2007-ST, stating that service tax on mobile phone services was admissible and provided BSNL bills showing payment of entire bill amounts with service tax for residential telephone lines.

On the other hand, the Revenue relied on a case law to argue against the admissibility of Cenvat credit on such telephone services.

The Tribunal considered the issue of whether Cenvat credit on telephone services at senior officers' residences was admissible when bills were paid by the appellant. It noted that previous case laws and high court decisions supported the admissibility of Cenvat credit on mobile and residential landline services. The bills for landlines at senior officers' residences were paid by the appellant, aligning with the business purpose criteria for input services. The Tribunal referenced previous decisions to support the appellant's eligibility for Cenvat credit on mobile/landline phones.

Consequently, the appeal was decided in favor of the appellant on merits. The Tribunal also held that since favorable decisions existed during the relevant period, the appellant could not be deemed to have taken credit with the intention to evade, making the demand time-barred.

In conclusion, the appeal was allowed in favor of the appellant, with any consequential relief granted as deemed appropriate.