2017 (12) TMI 1097 - AT - Service Tax

Interest - Penalty - Rule 15(1) of CCR, 2004 - CENVAT credit - input services - mandap keeper service - Held that - the appellants are not liable to pay interest and penalty because this particular service falls in the definition of input service - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against rejection of appeal by Commissioner (A) and confirmation of demand and penalties under CENVAT Credit Rules, 2004.

Analysis:
The appellant, a service provider, availed CENVAT credit for service tax payment but faced a demand for irregular credit availment. The lower authority confirmed a demand of ?1,77,877 and imposed penalties under Rule 15(1) and Rule 15(3) of CENVAT Credit Rules, 2004 along with Section 78 of the Finance Act, 1994. The appellant challenged this before the Commissioner (A) who rejected the appeal, leading to the present appeal.

The appellant argued that the impugned order failed to appreciate the factual and legal position. They contended that the allegedly ineligible services were used for business purposes, citing participation in Annual Day Celebration and Mandap Keeper services not being listed in the exclusive clause of 'input service' under CENVAT Credit Rules, 2004. The appellant relied on precedents like Toyota Kirloskar Motor Pvt. Ltd. Vs. CCE and decisions in CCE Vs. Samsung India Electronics Pvt. Ltd. and BNY Mellon International Operations (I) Pvt. Ltd. Vs. CCE to support their case.

Additionally, the appellant did not press for an amount of ?279 related to sodex coupons. They argued against liability for interest and penalties, asserting that the service in question fell within the definition of input service. The AR, however, supported the findings of the impugned order.

The judicial member, after considering the precedents cited, found the impugned order unsustainable and allowed the appeal of the appellant. The decision was pronounced in Open Court on 15/11/2017, setting aside the order.