2007 (1) TMI 181 - AT - Service Tax

Commissioner (Appeals) hold that services of CHA availed by the appellant should not be treated as input service as these services were received after the clearance of the final products from the place of removal - claim for Cenvat credit in respect of service tax paid on the security services was rejected on the ground that such services were received at the residential colonies - Prima facie the reasoning and findings reached by the Commissioner (Appeals) are on a correct interpretation of the relevant previsions stay not granted

Summary

Issues:
Challenge to Commissioner (Appeals) orders regarding treatment of C&F agent services and CHA services as input services for Cenvat credit.

Analysis:
In the appeals, the appellant contested the Commissioner (Appeals) orders, arguing that C&F agent services and Clearing House Agent (CHA) services should be considered input services under Rule 2(1) of the Cenvat Credit Rules, 2004, entitling them to Cenvat credit for the services availed. The Commissioner (Appeals) rejected the claim, stating that CHA services were received after the final product clearance and that security services, for which Cenvat credit was sought, were provided at residential colonies where company staff resided, making them ineligible for credit.

The Tribunal found the Commissioner (Appeals)' reasoning regarding CHA services and security services to be in line with the applicable provisions. Consequently, the Tribunal dismissed the applications, upholding the service tax and penalties imposed. The appellant was given six weeks to pay the outstanding amounts; failure to do so would result in dismissal of the appeals with default. The matter was scheduled for compliance reporting on 28-2-2007.

Therefore, the Tribunal upheld the Commissioner (Appeals) decisions, denying Cenvat credit for CHA and security services based on the timing of receipt and the location of service provision. The appellant was directed to settle the outstanding amounts within the specified timeframe to avoid dismissal of the appeals.