2018 (12) TMI 22 - AT - Service Tax

CENVAT Credit - input services - marketing consultancy services - event management services - appellant providing management maintenance or repair services - Time limitation - penalty - Held that - The findings of the adjudicating authority below for considering the title of the contract i.e. Maintenance Contract while denying the relief are opined to be a rigid opinion. There is a catena of judgements holding that irrespective of the nomenclature of the contract the contract has to be read as a whole. Accordingly, all the services as required by the said agreement alongwith the maintenance and management etc. becomes the input services being very much included in the definition of input services as given in Rule 3 of Cenvat Credit Rules, 2004 - the appellants were entitled to avail the Cenvat Credit. Time limitation - penalty - Held that - It was the onus of the Department to prove the alleged suppression or misrepresentation of the facts that too, with an intention of the appellant to evade the duty - There is no such evidence on record. Duty has regularly and duly been paid by the appellant. The Cenvat Credit as availed as being rightly availed - The show cause notice being beyond the period of one year is therefore held to be a time barred notice - penalty also not warranted. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Wrong availing of Cenvat Credit on marketing consultancy and event management services.
2. Interpretation of the contract between the appellant and M/s. Manium Properties Pvt. Ltd.
3. Denial of Cenvat Credit by the adjudicating authority.
4. Imposition of penalty and time-barred show cause notice.

Analysis:
1. The issue at hand revolves around the incorrect availing of Cenvat Credit by the appellant on services like marketing consultancy and event management, which were not considered input services. The Department issued a show cause notice for recovery, leading to the current appeal against the order of the Commissioner (Appeals).

2. The contract between the appellant and M/s. Manium Properties Pvt. Ltd. was crucial in determining the nature of services provided. The appellant argued that the contract included services beyond maintenance, such as sales promotion and marketing consultancy, which were integral parts of the agreement. The appellant contended that the show cause notice was based on a wrong presumption and requested the order to be set aside.

3. The adjudicating authorities denied the Cenvat Credit based on the definition of management, maintenance, and repair services, which did not explicitly cover marketing consultancy services. However, upon reviewing the contract annexed with the appeal memo, it was found that the appellant was indeed obligated to perform various marketing and promotional activities in addition to maintenance services. The Tribunal held that all services agreed upon in the contract, including marketing consultancy, were eligible as input services under the Cenvat Credit Rules.

4. Regarding the imposition of penalty and the time-barred show cause notice, the Tribunal emphasized that the Department failed to prove any suppression or intentional evasion of duty by the appellant. The Tribunal cited the Hindustan Steel case, highlighting that penalties should not be imposed for technical breaches or genuine misunderstandings. As there was no evidence of deliberate defiance of the law, the show cause notice was deemed time-barred, and no grounds for penalty imposition were found. Consequently, the impugned order was set aside, and the appeal was allowed.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, and the Tribunal's reasoning leading to the final decision.