2019 (10) TMI 581 - AT - Central Excise

CENVAT Credit - input services - Goods Transport Agency (GTA) service - Maintenance Repair of Immovable Property service - Renting of Immovable Property service - Department has entertained a view that the credit taken by the assessee on these input services either has not been used in providing output service or these cannot be input services for the output services provided by the appellant - HELD THAT - It has been made very clear that the Cenvat Credit Rules are applicable only to manufacture of excisable goods or the provider of the taxable output service. It has further been clarified from the provision of Rule 68(2) that the person providing GTA service is neither the provider of the output service nor the manufacturer of final product as required under Cenvat Credit Rules, 2004. It has further been clarified that the recipient of the taxable services, even if, they discharge their service tax liability under Rule 68(2) are not entitled to avail the credit of service tax paid on taxable services received by the them as per Cenvat Credit Rules, 2004. From the above clarification there remain no doubt that credit on input services in respect of GTA services are not admissible even for the period prior to 19.04.2006. So no credit of input service is admissible for payment of service tax in respect of output service of GTA provided by the assessee. In respect of other input services - HELD THAT - The services for the input service credit has been availed by the assessee have actually not gone into providing any output service of Maintenance Repair of the building or for service of Renting the property - The show cause notice as well as order-in-original mentioned that the services, which have been claimed by the assessee to have been used as input service for Maintenance Repair of Immovable Property and Renting of property have actually being used by them for construction of building on SEZ and some residential flats and therefore same cannot be input services for their registered output services. Appeal dismissed.

Issues:
1. Availment of Cenvat credit on input services for various service categories.
2. Service tax payment records scrutiny for correct invoicing and prorata basis.
3. Reversal of Cenvat credit under Rule 14 of Cenvat Credit Rules, 2004.
4. Eligibility for Cenvat credit under Rule 3 of Cenvat Credit Rules, 2004.
5. Interpretation of Rule 6(6A) inserted via Finance Act, 2012.
6. Legal grounds for denial of service tax demands.
7. Applicability of Cenvat Credit Rules to GTA services.
8. Usage of input services for providing output services.
9. Relevance of case laws in the context of input services usage.
10. Credit availed on invoices in the name of other legal entities.

Analysis:
1. The appeals involved challenges against an impugned order regarding the availment of Cenvat credit on input services by the assessee and the scrutiny of service tax payment records. The department observed discrepancies in credit utilization and invoicing, leading to a demand for reversal of Cenvat credit under Rule 14 of Cenvat Credit Rules, 2004.

2. The scrutiny revealed issues with correct invoicing and prorata basis payment of service tax, resulting in a show cause notice for Cenvat credit reversal and demands for service tax, interest, and penalties. The Order-in-Original confirmed most charges against the assessee, prompting appeals from both parties.

3. The advocate for the assessee argued for eligibility of Cenvat credit under Rule 3 of Cenvat Credit Rules, 2004, citing exemptions and provisions for input services used in construction and maintenance of immovable property. The advocate relied on relevant case laws to support their contentions.

4. The Revenue supported the findings of the impugned order, leading to a detailed examination by the Tribunal. The Tribunal deliberated on the demands for service tax, Cenvat credit reversal, and the applicability of Cenvat Credit Rules to GTA services.

5. The Tribunal upheld the service tax demands for specific periods but found discrepancies in the usage of input services for providing output services. The Tribunal clarified that certain input services claimed by the assessee did not align with their registered output services, leading to the dismissal of the appeals.

6. The Tribunal emphasized that the input services must directly relate to the registered output services, highlighting the importance of correct invoicing and utilization of credit. The Tribunal found no legal grounds to interfere with the Order-in-Original, ultimately dismissing both appeals.

7. The judgment underscored the necessity for proper utilization of Cenvat credit and adherence to the provisions of Cenvat Credit Rules, 2004. The Tribunal's decision was based on factual findings and legal interpretations, concluding that the Order-in-Original was lawful and accurate.

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