2008 (11) TMI 140 - AT - Service Tax

Input services demand raised and penalty imposed by denial of credit - Cenvat credit of input services such as Outdoor Caterer s Service, Vehicle maintenance, Rent-a-Cab service, Services provided for residential colony - All the four services are prima facie held to be eligible input service in light of various decisions of tribunal - Therefore, the applicants have made out a strong prima facie case for waiver of duty and penalty

Summary

Issues:
Waiver of pre-deposit of total duty amount and penalty representing Cenvat credit of input services such as Outdoor Caterer's Service, vehicle maintenance, Rent-a-Cab service, and services provided for residential colony disallowed.

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI involved the consideration of applications for the waiver of pre-deposit of duty and penalty amounting to Rs. 3,77,615/- and Rs. 1,10,000/- respectively, related to the disallowance of Cenvat credit on various input services. The services in question included Outdoor Caterer's Service, vehicle maintenance, Rent-a-Cab service, and services provided for a residential colony. The Tribunal noted that these services were prima facie held to be eligible input services based on previous decisions. Notably, the Larger Bench decision in CCE, Mumbai-V v. GTC Industries Limited had established that outdoor caterer's service is an eligible input service in a manufacturer's canteen. Similarly, in other cases such as Kirloskar Oil Engines Limited v. CCE, Aurangabad, Andhra Pradesh Paper Mills Limited v. CCE, Vishakhapatnam, and CCE, Nagpur v. Manikgarh Cement, credits on vehicle maintenance, rent-a-cab services, and various other services provided for a residential colony were held to be admissible. As a result, the Tribunal found that the applicants had presented a strong prima facie case for the waiver of duty and penalty. Consequently, the Tribunal decided to waive the service tax amounts and penalties, along with staying the recovery pending appeals. The judgment was dictated and pronounced in open court by the Tribunal.