2023 (9) TMI 645 - AT - Central Excise

CENVAT Credit - denial on account of nexus of input service with output service - Customs House Agent Service - Goods Transport Agency Services - Banking Services - Commercial Industrial Construction Services etc. - penalties - HELD THAT - The appellants are eligible for availing credit on Commercial Industrial Construction Service for the period prior to 01.04.2011 - on this count, credit of Rs. 207/- is not admissible to the appellants. Rest of the credit is, however, admissible. Photocopy Service - HELD THAT - The credit of Rs.32,795/- is admissible; similarly, CENVAT credit of Rs.3,658/- on Repair Services is also admissible. The appellants have not disputed the denial of credit of Rs.3,70,800/- on Renting of Property Service and have reversed the same. Thus, a total of Rs.3,71,007/- is not admissible. Customs Clearance Services - Tour Travels Services - HELD THAT - The impugned order records that the appellants have not produced invoices etc. to prove that the credit is correctly availed by them. While holding in principle that credit on these two services is admissible to the appellants, the issue requires to go back to the Adjudicating Authority to calculate the admissible credit on the basis of the evidence that may be produced by the appellants. Penalties - HELD THAT - As the issue pertains to interpretation wherein most of the issues were settled by the decisions of this Tribunal at a later date, the appellants cannot be held to have any intention to evade payment of duty. Therefore, no penalties are imposable. The Adjudicating Authority shall calculate the credit admissible on the two disputed services i.e. Customs Clearance Services and Tour Travels Services - Appeal allowed by way of remand.

Summary

Issues involved:
The issue involves the admissibility of credit on various input services like Customs House Agent Service, Goods Transport Agency Services, Banking Services, Commercial & Industrial Construction Services, etc., in the context of manufacturing activity.

Admissibility of credit on Construction Services:
The appellants contested the denial of credit on Construction Services, Customs Clearance Services, Renting of Property Services, and Installation Services. The appellants accepted the inadmissibility of credit on renting of property and reversed the credit accordingly. The appellants argued that the issue of Construction Services had been settled in their favor by previous Tribunal judgments. They also cited a previous order where Customs Clearance Service, Construction Service, and Photocopy Service were deemed admissible.

Evidence for Customs Clearance Services and Tour & Travels Services:
The Department contended that the appellants failed to provide sufficient documentary evidence to establish a clear nexus between the input services of Customs Clearance Services and Tour & Travels Services and the products manufactured and exported. The invoices submitted were deemed vague, lacking clarity on the services availed. The Department highlighted that the services of Customs House Agent were indicated for liaising with DGFT Authorities for obtaining DEPB Licenses.

Remand for further examination:
The appellants acknowledged that the show-cause notice stemmed from an audit objection and offered to present the necessary documents to the Adjudicating Authority for review. The Tribunal, after considering both sides, ruled that the appellants were eligible for credit on Commercial & Industrial Construction Service for a specific period. The Tribunal found certain credits admissible, such as Photocopy Service and Repair Services, while acknowledging the inadmissibility of Renting of Property Service. However, regarding Customs Clearance Services and Tour & Travels Services, the issue was remanded back to the Adjudicating Authority for recalculating admissible credit based on additional evidence to be provided by the appellants.

Penalties and final decision:
Given the interpretational nature of the issues and the absence of intent to evade duty, no penalties were imposed on the appellants. All appeals were allowed for remand, directing the Adjudicating Authority to determine the admissible credit for Customs Clearance Services and Tour & Travels Services based on the evidence submitted within a specified timeframe.

*(Pronounced on 14/09/2023)*