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2019 (7) TMI 1771 - AT - Service TaxCENVAT Credit - air ticket and travel agency services as availed by the Appellant - penalty under renting of immovable property - HELD THAT - The issue of penalty under renting of immovable property service it is found that the present issue involved in this appeal is no more res-integra in view of the decision of the Tribunal in the case of M/S R.K. REFRESHMENT AND ENTERPRISES (P) LTD M/S R.K. ASSOCIATES AND HOTELIERS (P) LTD VERSUS CCE RAIPUR 2018 (2) TMI 1412 - CESTAT NEW DELHI where it was held that though the said sub-section was basically with reference to renting of immovable property service the main Section 80 is still available to the appellant considering that the tax liability under renting of immovable service was subject matter of various disputes amendments including retrospective amendment. As such the penalty imposed on this service is waived invoking provisions of Section 80 - thus the penalty is set aside. CENVAT Credit - travel expenses - HELD THAT - The actual amount of CENVAT Credit was 21, 552/- and the credits were taken basically against Travelling Agency Service and such services were basically used/consumed by an individual in personal capacity and were not related with the main business activity of the assessee either on the count of manufacturing activity or provision of output service. Such services cannot be included to be input services within the meaning of Rule 2(1) of CENVAT Credit Rules 2004. The assessee had reversed / paid CENVAT Credit to the extent of 566/- alongwith interest of 111/- vide entry serial No. 412 dated 01.07.2013 i.e. before issuance of the Show Cause Notice against such wrong availment and utilization of total credit of 21, 552/- - The assessee were rather agreeing to the contentions of audit as well as demands raised in the Show Cause Notice. On this count the differential CENVAT Credit to the tune of 21, 522/- was inadmissible recoverable from the assessee. Appeal allowed in part.
Issues:
1. Eligibility of Cenvat credit on air ticket, and travel agency services. 2. Imposition of penalty of ?59,328 under renting of immovable property. Analysis: Issue 1: The appellant availed Cenvat credit on air tickets, travelling expenses, and travel agency payments, claiming it as a business expense. The appellant argued that they were rightfully eligible for the credit. The Adjudicating Authority confirmed the demand of ?21,522 for irregular Cenvat credit availed by the appellant. The Commissioner (Appeals) set aside the demand of ?4,41,874 on supply of tangible goods service but confirmed the demand of ?59,328 under renting of immovable property service. The appellant contended that they had already paid the entire amount with interest before the issuance of the Show Cause Notice, indicating no malafide intent. The tribunal observed that the appellant had reversed/paid a portion of the Cenvat Credit before the issuance of the notice, agreeing with the demands raised. Therefore, the tribunal held that the differential Cenvat Credit of ?21,522 was inadmissible and recoverable from the appellant. Issue 2: The tribunal referred to previous decisions regarding the penalty under renting of immovable property service. Citing the case of R.K. Refreshment & Enterprises (P) Ltd., the tribunal noted that the penalty could be waived under Section 80 if the tax liability was subject to disputes and amendments. The tribunal also referred to the case of Sree Kanyacombines, where penalties were set aside due to reasonable cause for failure to pay service tax on renting of immovable property. Applying these precedents, the tribunal set aside the penalty of ?59,328 imposed on the appellant for renting of immovable property service. In conclusion, the tribunal partly allowed the appeal, setting aside the penalties imposed on the appellant and confirming the inadmissibility of the Cenvat Credit amount.
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