2007 (12) TMI 54 - AT - Service Tax

Ad. authority had disallowed the credit in respect of security services on the ground that the bills issued by service provider do not bear any specific name and address - certificate produced before the Comm (A) to establish that the services had been rendered by the service provider to them - no fault can be found on the reliance placed by the Comm. (A) on the certificate - Rule 15(1) not applicable to present case, there is no warrant to interfere with the reduction in penalty

Summary

Issues:
Extension of credit for security services disallowed by adjudicating authority; Reduction in penalty under Rule 15 of Cenvat Credit Rules.

Extension of Credit for Security Services:
The Revenue appealed against the extension of credit for security services amounting to Rs.50,542, disallowed by the adjudicating authority due to lack of specific name and address on the bills. The Commissioner (Appeals) allowed the credit based on a certificate from the service provider, M/s. Pink City Security Service. The Revenue objected, citing Rule 5(1) of the Central Excise Rules, which prohibits additional evidence before the Commissioner (Appeals). However, it was found that the disallowance was primarily due to services provided at the residence, and the certificate was produced to establish service provision. The Tribunal upheld the Commissioner's decision, stating no fault in relying on the certificate to establish service provision.

Reduction in Penalty under Rule 15:
The Revenue argued that the penalty should not be less than Rs.10,000 as per Rule 15(1) of the Cenvat Credit Rules, 2004. However, it was clarified that Rule 15(1) applies to inputs or capital goods, while Rule 15(3) pertains to input services, which limits the penalty to Rs.10,000. The Tribunal noted that if the penalty exceeded Rs.10,000, the assessee would be aggrieved, not the Revenue. As Rule 15(1) was not applicable to the case, the Tribunal upheld the reduction in penalty and rejected the appeal.

In conclusion, the Tribunal upheld the extension of credit for security services based on the certificate provided and rejected the Revenue's appeal for a reduction in penalty under Rule 15, clarifying the applicable rule and penalty limit for input services.