2009 (4) TMI 144 - AT - Service Tax

Cenvat Credit Input Services - repair and maintenance service security agency service C&F agents service warehousing service and credit card service etc. held that - Cenvat credit of Service tax on credit card services is disallowed and security agent services is allowed. - As regards the remaining services which have been allowed by Commissioner (Appeals) the proportionate inadmissible credit relatable to the period prior to 10-9-2004 will have to be worked out by the Original Adjudicating Authority and revised. For this limited purpose the matter is remanded to the Original Adjudicating Authority.

Summary

Issues:
1. Availment of Cenvat credit on various input services.
2. Disallowance of Cenvat credit on services utilized prior to 10-9-2004.
3. Disallowance of Cenvat credit on credit card services and security services.
4. Interpretation and admissibility of Cenvat credit on different services.
5. Re-working of inadmissible credit and imposition of penalty.

Analysis:
1. The appellants availed Cenvat credit on services like repair and maintenance, security agency, C&F agents, warehousing, and credit card services. The Commissioner (Appeals) allowed Cenvat credit on services utilized at the port for export but disallowed credit on services used before 10-9-2004 and credit card services, leading to the appeal.

2. The CA argued that the security services were provided for multiple areas, not just the residential colony, and fell under the specified services for full credit under Rule 6(5) of Cenvat Credit Rules. The Tribunal found the credit admissible for security services and directed the Original Adjudicating Authority to calculate the proportionate credit for repair and maintenance services and other services used post-10-9-2004.

3. Regarding repair and maintenance and management consultancy services, the Tribunal agreed with the CA that proportionate credit should be allowed for the period post-10-9-2004 based on the invoices provided. The Tribunal also supported the appellants' argument using a circular for pro rata collection of service tax for advance services.

4. The Cenvat credit on credit card services was disallowed, while security agent services were allowed. The Tribunal remanded the matter to the Original Adjudicating Authority to calculate the proportionate inadmissible credit for services used before 10-9-2004. The penalty was set aside for re-consideration along with the revised credit calculation.

5. Given the interpretation and admissibility issues, the penalty was set aside for reconsideration, allowing the appellants an opportunity to present their case. The Tribunal emphasized the need for re-working the inadmissible credit and directed the Original Adjudicating Authority to reassess the penalty if required.