2017 (6) TMI 889 - AT - Central Excise

CENVAT credit - input services - repair work at their guest house at Bangalore - AMC charges for hospital equipments - AMC charges for their New Delhi plant and sites situated at Assam - Held that - the appellant s case is covered by the decision in the case of Veena Industries Limited 2016 (1) TMI 161 - CESTAT AHMEDABAD wherein it has been held that the appellant has rightly taken the CENVAT credit on the input service provided by the sub-contractors and they have paid the applicable service tax on the output service provided by them - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against rejection of cenvat credit on input services
- Allegations of suppression and evasion of duty
- Jurisdiction of Central Excise Authorities
- Applicability of decided case laws
- Barred by limitation

Analysis:
The appeal was filed against the rejection of cenvat credit on input services by the Commissioner (Appeals) and upholding of the Order-in-Original. The appellant, engaged in manufacturing excisable goods, availed credit on input services like repair work, AMC charges, etc., which were challenged as not falling under the definition of 'input service'. Allegations of suppression and evasion of duty were made, leading to a show-cause notice demanding recovery of wrongly availed cenvat credit, interest, and penalty under Section 11AC of the Central Excise Act, 1944. The original authority confirmed the demand, which was upheld by the Commissioner.

The appellant argued that the impugned order lacked legal sustainability as it did not consider the evidence on record or relevant case laws. It was contended that the input service credit was related to output services rendered, with service tax paid in full on the output services. The appellant claimed that most of the credit pertained to input services used for providing output services, duly reflected in the Service Tax Return, and that there was no suppression of information. The appellant challenged the jurisdiction of the Central Excise Authorities and the invocation of the extended period, citing specific decisions like CST Vs. Godfrey Philips (I) Ltd. and United Phosphorus Ltd. Vs. CCE. It was argued that the demand was time-barred as the show-cause notice was issued beyond one year from the availing of credit, relying on authorities like CCE Vs. Nepa Ltd. and Indian Oil Corporation Ltd. Vs. CCE.

The learned AR supported the findings of the impugned order, while the Tribunal, after considering the submissions, found that the appellant's case aligned with the decision in Veena Industries Limited, where it was held that the cenvat credit on input services provided by subcontractors was valid, with applicable service tax paid on the output services. Citing the Division Bench decision of the Tribunal, the Tribunal concluded that the appellant's case was in line with the decisions cited, setting aside the impugned order and allowing the appeal with consequential relief.