2017 (7) TMI 335 - AT - Central Excise

CENVAT credit - input services - Call Centre Services received by the appellant after clearance of goods for sale promotion - Held that - the services provided by Call Centres are in nature of sale promotion, as the services of sale promotion is covered under Rule 2(l) of the Cenvat Credit Rules, 2004, therefore, the Ld. Commissioner (A) has rightly allowed cenvat credit on the services received from the call centres as sale promotion services. Scrap cleared without payment of duty - time limitation - Held that - the generation of scrap in the factory of the respondent was well with the knowledge of the Revenue. In that circumstances, the extended period of limitation is not invokable and the Ld. Commissioner (A) has rightly dropped the demand on scrap which is beyond normal period of limitation. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Cenvat credit on Call Centre Services availed after clearance of goods for sale promotion.
2. Demand on scrap cleared without payment of duty.

Analysis:
1. The appellant availed cenvat credit on Call Centre Services, which the Revenue sought to deny as the services were received after the sale of goods. The Revenue argued that these services did not qualify as input services under Rule 2(l) of the Cenvat Credit Rules, 2004. However, the Ld. Commissioner (A) allowed the cenvat credit, considering the services as sale promotion services covered under the rules. The Ld. AR for the Revenue contended that the services were post-sale and not eligible for credit. The Tribunal found that the services were utilized for feedback and product improvement, akin to sale promotion, thus upholding the Commissioner's decision to allow the credit.

2. The appellant was also accused of clearing scrap without paying the duty, leading to a demand from the Revenue. The Ld. AR argued that the appellant did not disclose the clearance of scrap without duty payment. However, the Tribunal noted that the Revenue was aware of the scrap generation since 2011, and the extended period of limitation did not apply. As the Revenue had prior knowledge of the scrap generation and no tax evasion was proven, the demand on scrap beyond the normal limitation period was dropped by the Ld. Commissioner (A). Consequently, the Tribunal upheld the decision to dismiss the appeal filed by the Revenue, as there was no error found in the impugned order.

In conclusion, the Tribunal affirmed the allowance of cenvat credit on Call Centre Services for sale promotion and rejected the demand on scrap cleared without duty payment due to the Revenue's prior knowledge and absence of tax evasion.