2018 (3) TMI 108 - AT - Service Tax

CENVAT credit - various input services - improperly availed CENVAT credit - Held that - identical issue has attained finally in the hands of4 the Tribunal in the appellant s own case Excellence Data Research Pvt. Ltd. Versus Commissioner of Central Excise, Customs and Service Tax Hyderabad 2017 (5) TMI 1300 - CESTAT HYDERABAD , where it was held that the period involved is prior to 01/04/2011. The definition of input services during the period had wide ambit as it included the words activities relating to business. The credit is eligible on the said services if the same are used for providing output services - credit allowed. Improperly availed CENVAT credit - Held that - in the reply to the show cause notice appellant had consistently taken a plea that this amount has been reversed by them in August 2011 itself. Despite such a clear submission by the appellant, I find that the first appellate authority as well as adjudicating authority have not recorded any findings on this issue - matter needs reconsideration. Appeal allowed in part and part matter on remand.

Summary

Issues:
1. Denial of cenvat credit on various input services
2. Confirmation of demand of an amount improperly availed cenvat credit

Analysis:
1. The appeal involved two main issues. Firstly, the denial of cenvat credit on various input services. The appellant contested the rejection of eligibility availment of a specific amount, citing a previous judgment in their favor. The Tribunal reviewed the services in question, including business support services, information technology software services, renting of immovable property services, and others. The Tribunal found that the lower authorities erred in their decision, as the input services were essential for providing output services. The impugned order was set aside, and the appeal was allowed with consequential relief.

2. The second issue pertained to the confirmation of demand for improperly availed cenvat credit. The appellant claimed to have reversed the amount in question before the issuance of the show cause notice. However, the lower authorities did not address this submission in their findings. The Tribunal noted the importance of this issue in relation to interest and penalties and remitted the matter back to the adjudicating authority for re-adjudication. The impugned orders confirming the demand with interest and penalty were set aside, and the issue was to be reconsidered following the principles of natural justice.

In conclusion, the appeal was disposed of with the first issue being decided in favor of the appellant due to the essential nature of the input services for providing output services. The second issue regarding the confirmation of demand for improperly availed cenvat credit was remitted back for re-adjudication considering the appellant's submission of reversal before the show cause notice.