2019 (7) TMI 214 - AT - Service Tax

CENVAT Credit - input services - Renting of Immovable Property Service - HELD THAT - For the purpose of establishing the correlation of the service on which the cenvat credit was availed and the output service provided, the present case remanded back to the original authority to pass a fresh order after considering the documents which may be produced by the appellant in support of their case - appeal allowed by way of remand.

Summary

Issues:
1. Condonation of delay in appeals
2. Denial of cenvat credit on input services
3. Correlation between input services and output services
4. Remand of the case to original authority

Analysis:
1. The judgment begins by addressing the delay of 78 days in both appeals, which is condoned by the Judicial Member. The decision to proceed with both appeals together is made due to the narrow compass of the issue involved in both cases.

2. The primary issue revolves around the denial of cenvat credit on various services that the appellant claimed as input services. The appellant argued that services like maintaining telephones, trailers, annual membership fees, professional charges, and tyre retreading charges are essential for rendering output services. The appellant contended that these services fall under the definition of 'input services' and are indirectly connected to the output service. However, the AR defended the impugned order, stating that the appellant failed to establish a direct nexus between the input services claimed and the output services rendered.

3. The judgment delves into the crucial aspect of establishing a correlation between the input services availed and the output services provided. The Tribunal noted a previous order where a similar issue was remanded back to the original authority for a fresh decision. The Tribunal emphasized the need for sufficient evidence to establish the correlation between input and output services. In this case, the Tribunal decided to remand the present case to the original authority for a fresh order after considering any additional documents that the appellant may produce to support their claim. The original authority is instructed to comply with the principles of natural justice and give the appellant adequate opportunity to present supporting documents.

4. Ultimately, the judgment concludes by allowing both appeals by way of remand, following the precedent set in a previous decision. The decision to remand the case aims to ensure a thorough reconsideration of the issue by the original authority, taking into account the documents provided by the appellant and the Tribunal's decisions on similar matters. The operative portion of the order was pronounced in open court on a specific date.

This detailed analysis of the judgment highlights the key issues addressed, arguments presented by both parties, and the Tribunal's decision to remand the case for a fresh order based on the need for establishing a clear correlation between input and output services.