2018 (3) TMI 744 - AT - Central Excise

CENVAT credit - input services - air travel agents service - telephone services - rent-a-cab services - goods transport agency services - legal consultancy services - other miscellaneous - credit involved in input service distribution - Held that - Eligibility for CENVAT credit on air travel agents service is settled by the decision of the Tribunal in Steadman Pharmaceuticals (P) Ltd v. Commissioner of Central Excise, Chennai - III 2016 (7) TMI 590 - CESTAT CHENNAI , where it was held that when air travel was performed for the purpose of company business the Service Tax paid on the said air travel agent service is admissible as credit, the same principle is applicable for rail travel agents service also - credit allowed. Telephone service - Held that - Eligibility of telephone service settled by Commissioner of Central Excise, Chennai v. Fourrts (I) Laboratories Pvt Ltd 2009 (10) TMI 175 - CESTAT, CHENNAI , where it was held that as regards telephone service, since they are required to meet out day to day business activities, such services are also in relation to business falling within the scope of the definition of input service and therefore service tax credit on telephone service is admissible - credit allowed. Rent a cab service - legal consultancy service - Held that - rent-a-cab service and legal consultancy service are inputs within the meaning of rule 2(l) of CENVAT Credit Rules, 2004 with no justifiable ground for denying availment - credit allowed. Other miscellaneous service - Held that - an amount of ₹ 21,185/- was availed as credit of the tax paid on the sitting fees of Directors on reverse charge basis . It is well settled in law that tax discharged as reverse charge can be availed as CENVAT credit - credit allowed. Credit availed for input service distribution - Held that - it is the claim of the appellant that recovery cannot be effected from the recipient of the service - Reliance has been placed on the decision of the Tribunal in Commissioner of Central Excise, Belapur v. Elder Pharmaceuticals Limited 2014 (11) TMI 76 - CESTAT MUMBAI , where it was held that Commissioner has no jurisdiction to reallocate the CENVAT credit to the assessee in question as there was no such allegation in the show-cause notice and he cannot go beyond the allegation in the SCN to decide the issue - There is no clear finding on this aspect in the order of the two lower authorities. This needs fresh determination. GTA service - Held that - Credit availed on goods transport agency service , being relatable to outward transportation is disallowed - credit denied. Appeal allowed in part and part matter on remand.

Summary

Issues:
Appeal against rejection of appeal by Commissioner of Central Excise, eligibility for CENVAT credit on various services, availing credit on reverse charge basis, recovery of input service distribution, disallowance of credit on certain services, remand for fresh decision.

Analysis:
The appellant appealed against the rejection of their appeal by the Commissioner of Central Excise regarding the eligibility for CENVAT credit on various services. The CENVAT credit in question, amounting to ?2,43,139/- for the period between April 2005 and June 2013, pertained to services such as 'air travel agents', 'telephone', 'rent-a-cab', 'goods transport agency', 'legal consultancy', 'other miscellaneous', and ?3,31,464/- procured by an 'input service distributor'.

The Tribunal considered the eligibility for CENVAT credit on different services based on precedents. It was established that credit for 'air travel agents service' and 'telephone service' was settled by previous decisions. Additionally, 'rent-a-cab service' and 'legal consultancy service' were deemed as inputs under the CENVAT Credit Rules, 2004, with no valid reason for denial. The credit availed on 'other miscellaneous service', specifically on sitting fees of Directors on a reverse charge basis, was also upheld as permissible under the law.

Regarding the credit availed for input service distribution, the appellant contended that recovery cannot be made from the recipient of the service. Citing a relevant precedent, the Tribunal noted the lack of a clear finding on this matter in the lower authorities' orders, necessitating a fresh determination.

Consequently, the Tribunal allowed the appellant's entitlement to CENVAT credit, except for the credit on 'goods transport agency service', which was disallowed as it was related to outward transportation. The dispute concerning the 'input service distributor' was remanded to the adjudicating authority for a fresh decision, emphasizing the need for clarity on the recovery aspect.

In conclusion, the appeal was disposed of with the above decisions pronounced in court, providing clarity on the allowed and disallowed credits while highlighting the need for further examination on specific issues.