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2015 (12) TMI 212 - AT - Service TaxDisallowance of CENVAT Credit - Maintenance or Repair Service and Video Tape production services - Imposition of penalty - Held that - Regarding eligibility of credit on video tap production based on satellite services received from various locations by the service receiver, it is observed that there is no ground to deny the credit merely on the ground that service has been received from different location. Once there is no contest relating to provision of service and subsequent receipt, input service credit is admissible and credit amounting to ₹ 2,39,146/- is allowed. - appellants have accepted the wrong availment of Cenvat credit of ₹ 60,066/-. However credit of ₹ 2,39,146/- has been found to be admissible - imposition of penalty of ₹ 30,000/- requires to be modified. It is reduced ₹ 15,000/-. However penalty under Section 77 is not interfered with - Decided partly in favour fo assessee.
Issues: Recovery of Cenvat credit with interest, imposition of penalties under Rule 14, Rule 15(1) of Cenvat Credit Rules, 2004, and Section 77 of Finance Act, 1994. Contest on grounds No. 3 & 5 regarding Cenvat credit disallowed and denial of credit from a service provider. Discrepancy in invoices from a specific service provider. Eligibility of Cenvat credit on video tape production based on satellite services. Waiver of penalties under Section 15(1) and reduction of penalty under Section 77.
The appellant appealed against an Order-in-Original confirming the recovery of Cenvat credit with interest, amounting to Rs. 2,99,212, under Rule 14 of Cenvat Credit Rules, 2004. Penalties of Rs. 30,000 under Rule 15(1) and Rs. 10,000 under Section 77 of Finance Act, 1994, were imposed. The appellant, engaged in Maintenance or Repair Service and Video Tape production services, contested mainly on grounds No. 3 & 5, involving disallowed Cenvat credit from specific invoices and denial of credit from a service provider, totaling Rs. 2,38,012. The contest revolved around Satellite Telecommunication Services utilized for Video Tape Production, raising issues about service receipt locations and transmission to the service receiver. The Commissioner disallowed credit related to two specific invoices, totaling Rs. 2,39,146, concerning Maintenance or Repair Service and Video Tape production services for event broadcasting. The contention focused on the discrepancy in invoices from a particular service provider, Ashish Mark-N-Ad Pvt. Ltd., where tampered invoices were presented during the hearing. The appellant was found to have misled the court, leading to the denial of credit on these invoices and imposition of a Rs. 10,000 cost for misguiding the court, to be given to the CESTAT Bar, New Delhi. The eligibility of Cenvat credit on video tape production based on satellite services received from various locations was examined. It was concluded that credit should not be denied solely due to service reception from different locations, as long as the provision and receipt of service were established. Hence, a credit amounting to Rs. 2,39,146 was allowed. Regarding penalties, it was noted that the appellant accepted the wrongful availment of Rs. 60,066 Cenvat credit, but the admissible credit was Rs. 2,39,146. Consequently, the penalty under Rule 15(1) was reduced from Rs. 30,000 to Rs. 15,000, while the penalty under Section 77 remained unchanged. The appeal was partly allowed based on the above terms.
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