2017 (8) TMI 633 - AT - Service Tax

CENVAT credit - Telephone charges - Airport Related services - scope of input services - Held that - the Telephone Services fall in the definition of input service and the appellant is entitled to cenvat credit of the same - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeals against orders rejecting appellant's appeals and upholding Orders-in-Original regarding service tax demand and cenvat credit on Telephone Bills.

Analysis:
The appellant, an airport service provider, filed appeals against orders rejecting their appeals and upholding service tax demands. The issue in all three appeals was the disallowance of cenvat credit on Telephone Bills. The appellant argued that the denial of cenvat credit was based on a misinterpretation of the definition of 'input service' under Cenvat Credit Rules 2004. They contended that the telephone charges were for services provided to various agencies at the airport and thus eligible for cenvat credit. The appellant cited judicial precedents supporting their position and highlighted that for subsequent periods, appeals on identical issues were allowed by the Commissioner (Appeals).

The appellant's consultant argued that the telephone services qualified as 'input services' and that the appellant was entitled to cenvat credit. They emphasized that the service tax on Telephone Charges was paid by the appellant and not the agencies, and the charges were included in the taxable value of the airport services. The consultant referenced several decisions supporting their stance. The Commissioner (Appeals) had allowed appeals for subsequent periods on the same issue, indicating inconsistency in the decisions.

Upon reviewing the submissions, the Tribunal found in favor of the appellant. Citing previous decisions, the Tribunal held that Telephone Services fell within the definition of 'input service,' entitling the appellant to cenvat credit. The Tribunal noted that the Commissioner (Appeals) had allowed cenvat credit on Telephone Services for subsequent periods. Consequently, the Tribunal deemed the orders denying cenvat credit on Telephone charges as legally unsustainable and allowed all three appeals by overturning the impugned orders.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the orders that denied cenvat credit on Telephone Bills. The decision was based on the interpretation of 'input service' and consistent rulings in similar cases, leading to the allowance of cenvat credit for the appellant.