2016 (8) TMI 757 - AT - Service Tax

Cenvat credit - Township security services - security services in question were provided to their residential township which is not in or in relation to the manufacture of final products or clearance of final products - Held that - the documents produced by the appellants indicate that the security services were provided by the service provider M/s Jayendra Security services only to the factory premises. Neither in the appellant been controverted or disproved. Nor is it the case of the department that the said documents relied upon by the appellant are concocted or otherwise not genuine. This being the case, security services provided in factory premises, has to be considered as an eligible input service for the purpose of rule 2(l) of the Cenvat Credit Rule, 2004. There cannot be any infirmity or legal bar in the appellant availing the disputed credit, and therefore, the impugned order is required to be set aside. - Decided in favour of appellant

Issues:
1. Availment of CENVAT Credit on specific services.
2. Show Cause Notices issued by the department.
3. Order-in-Original by the Assistant Commissioner.
4. Order-in-Appeal by the Commissioner.
5. Interpretation of 'input service' under CCR.
6. Applicability of security service as an eligible input service.
7. Arguments presented by both parties.
8. Examination of documents and submissions.
9. Decision on the appeal.

Analysis:

1. The case involves the appellant, a manufacturer of Heavy Machinery items, availing CENVAT Credit on various services under the CENVAT Credit Rule, 2004. The department alleged wrongful availment of credit on services like Township Security Service, Transportation Service, Canteen Service, and Professional/Consultancy Service during a specific period.

2. The department issued Show Cause Notices proposing recovery of credit along with interest and penalty. Subsequently, the Assistant Commissioner passed an Order-in-Original demanding recovery of a substantial amount towards the credit availed on ineligible services during a specified period, along with interest and penalty.

3. On appeal, the Commissioner allowed CENVAT Credit on certain services but denied it on security service, stating it did not fall under the definition of 'input service.' However, the Commissioner refrained from imposing a penalty due to the absence of wilful mistake or suppression of facts by the appellant.

4. During the hearing, the appellant's advocate argued that security services should be considered an 'input service' based on the definitions provided in the CCR. The appellant contended that the security services were utilized only for the factory premises and not the residential complex, as claimed by the department.

5. The department opposed the application, arguing that the security services were provided to the residential township, making them ineligible as an input service under the CCR. The appellant presented documents and submissions supporting their claim that the services were indeed for the factory premises.

6. The Tribunal examined the documents and found that the security services were specifically provided to the factory premises by the service provider. Considering the inclusion of 'security' in the definition of 'input service' under the CCR, the Tribunal concluded that the appellant was entitled to avail the disputed credit.

7. Ultimately, the Tribunal allowed the appeal, setting aside the impugned order and ruling in favor of the appellant based on the evidence presented and the legal interpretation of 'input service' under the CCR.

This detailed analysis covers the issues involved in the legal judgment, including the arguments, submissions, and the final decision rendered by the Tribunal.

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