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2017 (9) TMI 1190 - AT - Service TaxCenvat Credit - various input services - duty paying documents - reversal of CENVAT credit - proper invoices are not available for availing credit due to wrong address mentioned in the invoices, as the address given is that of Head Office, Delhi and not of the registered premises at Noida - Held that - it is not in dispute that the appellant have received the services and also paid the Service Tax on the invoices properly raised. Only for the sake of address of the Head Office, address of the Delhi office, their Service Tax credit cannot be denied. It has also been so clarified by the CBEC vide circular issued in the year 1996 and also in a catena of decision by this Tribunal - credit allowed. Service tax credit - Horticulture services - input services - Held that - garden services or Horticulture availed by appellant is an essential input service, more so for renting. Maintaining the commercial centre is essential so as to attract the receivers of taxable output service being provided by the appellant - credit allowed. CENVAT credit - dismantle of old labour huts at the site where the appellant have constructed their business centre/convention centre - input services - Held that - dismantling of old labour huts/units, post construction is an essential expenditure for providing the output services by the appellant and as such the Service Tax paid/incurred is also eligible for input credit - credit allowed. CENVAT credit - laying cable from Sub Station to the appellants premises - input services - Held that - the appellant cannot provide its output services without having electricity connection. Accordingly, the said service received is an essential input service as defined under Rule 2(l) of CCR, 2004 - credit allowed. CENVAT credit - renovation of faculty at Logix Techno Park Map - input services - Held that - there is insufficient evidence regarding this issue on record - matter remanded to the Adjudicating Authority/Commissioner with direction for deciding this issue afresh, after providing opportunity of hearing to the appellant - matter on remand. CENVAT credit - Opening balance of Cenvat Credit as on 1 October, 2007, appearing in the ST-3 return for the period October, 2007 to March, 2008 - denial on the ground that the appellant have been registered only with effect from 26 March, 2008 and hence they could not avail any Cenvat Credit prior that date - Held that - the fact that the appellant was registered with effect from 10 May, 2007, we allow the said grounds in favour of the appellant and hold that the credit of ₹ 24,92,138/- was rightly taken and reflected in their return - credit allowed. Advertisement abroad being expenditure in Foreign Currency - reverse charge mechanism - demand - Held that - tax is wrongly demanded because they have paid ₹ 15 lakhs advance to Sterling Generator Pvt. Ltd. in INR. Further, the appellant have also demonstrated that they have paid balance of ₹ 74,50,000/- in order to purchase the generator or the D.G. set, as per the Invoice dated 17 February, 2009 for the balance payment, being the final payment of ₹ 89,50,000/- on 17 February, 2009. Thus, the findings of the learned Commissioner are erroneous and factually wrong. Further, there is no material have been brought on record by the Revenue in support of its allegation of expenditure in Foreign Currency towards advertisement - allegations are erroneous and the conclusions are erroneous as drawn in the impugned order - demand set aside. Appeal allowed in part and part matter on remand.
Issues Involved:
1. Disallowance of Cenvat Credit of ?1,65,65,202/- 2. Demand of Service Tax of ?9,37,392/- on Reverse Charge Basis 3. Imposition of penalties under various sections and rules 4. Denial of input service credits on various grounds Issue-wise Detailed Analysis: 1. Disallowance of Cenvat Credit of ?1,65,65,202/-: - Registration Date Discrepancy (?98,24,253/-): The appellant contested the disallowance of Cenvat Credit on the ground that they were registered with the Service Tax Department from 10 May 2007. The learned AR agreed to the factual mistake, and the Tribunal allowed this ground, setting aside the disallowance. - Improper Invoices (?28,46,577/-): The disallowance was based on invoices with the wrong address. The Tribunal found that the appellant had only one registered premise and had paid the Service Tax on the services received. Thus, the credit was allowed despite the address discrepancy. - Horticulture Services (?3,70,540/-): The Tribunal held that horticulture services are essential for maintaining the commercial center and attracting service receivers. Consequently, the Cenvat Credit for these services was deemed allowable. - Dismantling of Old Labour Huts (?1,16,868/-): The Tribunal determined that dismantling old labour huts post-construction is essential for providing output services. Therefore, the Service Tax paid for this service was considered eligible for input credit. - Laying of High Tension Cable (?7,40,238/-): The Tribunal concluded that the appellant could not provide its output services without an electricity connection. Hence, the Service Tax paid for laying the high tension cable was allowed as input credit. - Renovation of Faculty at Logix Techno Park (?1,22,364/-): Due to insufficient evidence, this issue was remanded to the Adjudicating Authority for fresh adjudication after providing the appellant an opportunity for a hearing. - Opening Balance of Cenvat Credit (?24,92,138/-): The Tribunal allowed this ground, noting that the appellant was registered from 10 May 2007, and thus the credit was rightly taken and reflected in their return. 2. Demand of Service Tax of ?9,37,392/- on Reverse Charge Basis: - The Tribunal found that the demand was based on an erroneous conclusion that the appellant had made a foreign currency expenditure for advertisement. The appellant demonstrated that the amount in question was for the purchase of a generator. The Tribunal set aside the demand, holding that the findings of the Commissioner were factually wrong and unsupported by material evidence. 3. Imposition of Penalties: - The penalties under Section 78, Section 76, Section 77(1)(c)(iii) of the Act, and Rule 15 of CCR, 2004 were implicitly addressed through the resolution of the primary issues. Since the Tribunal allowed the appeal in part and remanded certain issues, the penalties associated with the disallowed credits and demands were also impacted accordingly. 4. Denial of Input Service Credits on Various Grounds: - The Tribunal addressed and resolved the denial of input service credits on various grounds, such as improper invoices, horticulture services, dismantling of old labour huts, laying of high tension cables, and renovation services. Each ground was analyzed based on the evidence and arguments presented, leading to either allowance or remand for further adjudication. Conclusion: The appeal was partly allowed and partly remanded. The Tribunal set aside the disallowance of Cenvat Credit on several grounds, allowed the credit for horticulture services, dismantling of old labour huts, and laying of high tension cables, and remanded the issue of renovation services for fresh adjudication. The demand of Service Tax on Reverse Charge Basis was also set aside, and the penalties were impacted accordingly. The stay application was disposed of.
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