2018 (3) TMI 492 - AT - Central Excise

CENVAT credit - input services - Event Management Service - penalty - Held that - these services are eligible input services since they are utilized for promoting sales of the vehicles manufactured by the appellant - matter remanded to the original authority for the limited purpose of confirming the quantum of such credit that can be availed, by causing verification of the documents. Penalty - Held that - there was no malafide in availing the disputed credits, hence there is a reasonable cause for having taken the credits, albeit wrongly, in respect of Award Scheme Event, which they were not eligible - penalty to be set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Dispute over irregular input credit availed on various input services including Event Management Service and Award Scheme Event, imposition of penalties under Rule 15 (2) of the Cenvat Credit Rules, 2004 and Rule 15 (1) ibid.

Analysis:
The appeals involved a dispute regarding the eligibility of input services and the imposition of penalties. The original authority disallowed input service credit for Event Management Service and Award Scheme Event, leading to a demand for reversal of credit along with penalties. The Commissioner (Appeals) upheld this decision, resulting in the appeals before the Tribunal.

The appellant contested the disallowance of credit for Event Management Services, arguing that these services were essential for promoting vehicle sales and thus eligible as per Rule 2(l) of the CCR 2004. However, they admitted to a lack of complete documentary evidence before the authorities. The appellant sought an opportunity to produce the necessary documents by remanding the matter to the original authority.

The respondent supported the impugned order, emphasizing the appellant's failure to provide concrete documentary evidence regarding the scope of activities covered by the services in question. After hearing both sides and reviewing the facts, the Tribunal upheld the denial of credit for the Award Scheme Event but found Event Management Services to be eligible input services, given their role in promoting vehicle sales.

Considering the lack of sufficient documentary evidence provided earlier, the Tribunal decided to remand the matter to the original authority to confirm the quantum of credit that can be availed based on the newly produced documents. The Tribunal also addressed the issue of penalties, noting the absence of malafide intent in availing the disputed credits. As a result, the penalties imposed were set aside, and the appeals were allowed under these terms.

In conclusion, the Tribunal resolved the dispute by upholding the denial of credit for one service while deeming the other service eligible, remanding the matter for further verification, and setting aside the imposed penalties due to the absence of malicious intent in availing the credits.