2016 (12) TMI 335 - AT - Central Excise

Denial of CENVAT credit - caffeine Anhydrous - the appellant availed the cenvat credit on service tax paid on the services provided by the contractor under the category of Business Auxiliary Services, in relation to dismantling of pipe line and on Civil Works done by the contractor to the tune of ₹ 3,22,492/-. The appellant also availed cenvat credit of ₹ 1426/- of service tax paid on commission paid on bookings of air ticket/ travel agent and Rsn 3,805/- of the amount of sale tax the appellant also availed cenvat credit on ₹ 1,020/- without any invoices - whether the appellant is entitled to CENVAT credit? Held that - The cenvat credit of ₹ 3,22,492/- has been availed in the activity of dismantling of pipe line and Civil Works. I have gone through the definition of input services as per Rule A(I) of the CCR, 2004 and hold that as the appellant has availed cenvat credit on the dismantling of pipe line and Civil Works for change of dismantling of pipe line in their factory, therefore, as these services has been availed by the appellant for renovation of pipe line, therefore, the appellant has correctly availed the cenvat credit of ₹ 3,22,492/- The appellant has availed the cenvat credit of ₹ 1426/- and ₹ 1,020/- but they have not produced any evidence for payment of service tax on that amount, therefore, the appellant is not entitled to take cenvat credit of ₹ 1426/- and ₹ 1,026/-. Further, the appellant has availed inadmissible cenvat credit of ₹ 3805/- on sale tax part shown in the invoices as the amount of ₹ 3805 is not amount of the services tax, therefore, on the said amount the appellant is not entitled to take cenvat credit. In result, cenvat credit on these amounts i.e. (Rs.1426.00 1026.00 3805) the appellant is denied. As the appellant has availed inadmissible cenvat credit of (Rs.1426 3805 1020) without any cover of invoices therefore, the appellant is liable to be penalised for availment of cenvat credit. As the appellant has paid the amount of inadmissible cenvat credit availed along with interest, therefore, penalty is reduced to 25% of the demand i.e. 25% of (Rs. 1426 3805 1020). Appeal disposed off - decided partly in favor of appellant-assessee.

Summary

Issues:
1. Denial of cenvat credit on various services availed by the appellant.
2. Applicability of cenvat credit on services related to dismantling of pipe line and Civil Works.
3. Evidence requirement for availing cenvat credit on specific amounts.
4. Admissibility of cenvat credit on sale tax part shown in invoices.
5. Penalty imposition for inadmissible cenvat credit availed without proper invoices.

Analysis:
The appellant appealed against an order denying cenvat credit on services availed, including Business Auxiliary Services for dismantling of pipe line, Civil Works, commission on air ticket bookings, and sale tax amounts. The Tribunal analyzed the nature of services and cenvat credit rules. Regarding the cenvat credit of Rs. 3,22,492 on dismantling of pipe line and Civil Works, it was held admissible as it was for renovation purposes, and the appellant did not contest this liability. However, cenvat credit of Rs. 1426 and Rs. 1,020 was denied due to lack of evidence for service tax payment. Additionally, inadmissible cenvat credit of Rs. 3,805 on sale tax part was not allowed. The appellant was penalized for availing cenvat credit without proper invoices, but the penalty was reduced to 25% of the demand as the appellant paid the inadmissible amount with interest.

The Tribunal emphasized the importance of proper documentation and evidence for availing cenvat credit. It differentiated between admissible and inadmissible cenvat credit based on the nature of services and compliance with tax payment requirements. The judgment highlighted that availing cenvat credit without valid invoices can lead to penalties. The appellant's appeal was disposed of with the decision on each specific amount of cenvat credit, considering the merits and compliance with legal provisions.

In conclusion, the Tribunal's decision clarified the criteria for availing cenvat credit on different services and the consequences of non-compliance with documentation and tax payment proofs. The judgment provided a detailed analysis of each service for which cenvat credit was sought, ensuring a fair and lawful resolution of the appellant's appeal.