2019 (11) TMI 958 - AT - Service Tax

Refund of unutilised CENVAT credit - input services - Works Contract Services - Business Auxiliary Service - HELD THAT - It appears that appellant is trying to remould its grounds of appeal at the argument stage to give it proper shape that would confirm to the provisions of law since primarily the rejection of availment of inputs on those services were excluded from the definition of credit on the ground that those were available in Rule 2(l) of CENVAT Credit Rules, 2004 and therefore are not eligible credits. Appellant also failed to substantiate that those services were not primarily for personal use or consumption of employees or not covered within the exclusion clause. Therefore, no irregularity or illegality can be attributed to the order passed by the learned Commissioner (Appeals). Appeal dismissed.

Summary

Issues: Denial of input credit on tax paid on various services like Air Travel Agent Services, Club and Association Services, Management Consultancy Services, Works Contract Services, Business Auxiliary Services, Electricity Charges.

1. Denial of Input Credit on Various Services:
The appellant, a private limited company engaged in investment advisory services, appealed against the denial of input credit on services like Air Travel Agent Services, Club and Association Services, Works Contract Services, Business Auxiliary Services, and more. The appellant claimed refund of unutilised CENVAT credit, part of which was rejected as inadmissible. The appellant argued that the services were essential for business purposes, citing relevant case laws in support of their claim. However, the respondent-department contended that the appellant failed to provide sufficient documentation to support their claims. Specifically, concerning Air Travel Agent services, the purpose of travel was not clearly justified for official use. The respondent also pointed out discrepancies in the grounds presented by the appellant regarding Works Contract Services and Business Auxiliary Service, indicating an attempt to reshape arguments during the appeal process. The denial of input credit was based on the exclusion clause in the CENVAT Credit Rules, 2004, and the appellant could not prove that the services were not for personal use or consumption by employees. Ultimately, the Tribunal found no merit in the appeal and dismissed it.

2. Documentation and Substantiation of Claims:
The appellant's argument for claiming input credit relied heavily on the necessity of the services for business operations. However, the respondent highlighted the lack of supporting documentation and inconsistencies in the appellant's submissions. Specifically, regarding Air Travel Agent services, the appellant failed to demonstrate the official purpose of travel, which raised doubts about the eligibility of claiming credit for such services. Similarly, discrepancies in the grounds presented for Works Contract Services and Business Auxiliary Service indicated a lack of clarity and consistency in the appellant's case. The Tribunal emphasized the importance of substantiating claims with proper documentation and adhering to the provisions of the law to qualify for input credit.

3. Interpretation of CENVAT Credit Rules:
The denial of input credit was primarily based on the exclusion clause in Rule 2(l) of the CENVAT Credit Rules, 2004, which deemed certain services ineligible for credit. The appellant's failure to prove that the services were not for personal use or consumption of employees further weakened their case. The Tribunal upheld the decision of the Commissioner (Appeals), stating that the grounds for denial of input credit were valid and in accordance with the provisions of the law. The appellant's attempt to reshape arguments during the appeal process was deemed insufficient to overturn the original decision. The judgment underscored the importance of adhering to the legal framework and providing clear justifications to claim input credit on taxable services.