2024 (10) TMI 1620 - AT - Service Tax

Change of cause-title in the appeal - disallowance of CENVAT credit on input services - HELD THAT - The issue in dispute is no more res integra and the Tribunal in the case of M/s Bharat Sanchar Nigam Ltd. V/s Commissioner of Central Excise Service Tax, Meerut-I 2024 (6) TMI 1423 - CESTAT ALLAHABAD held that ' It is not even the claim of the appellant that the CENVAT Credit should be allowed to them on the diesel/ electricity by treating them as input under Rule 2 (k) of the CENVAT Credit Rules, 2004. The fact that service provider has paid service tax on the service provided by him consuming these inputs is not in dispute. We do not find any merits in the findings recorded by the adjudicating authority in respect of this demand and set aside the same.' The facts of the present case are squarely covered by the aforesaid decision of the Tribunal and the same is followed - the impugned order is set aside and the appeal filed by the Appellant is allowed.

Summary

Issues:
1. Change of cause-title in the appeal.
2. Disallowance of CENVAT credit on input services.
3. Demand of service tax, interest, and penalty.

Analysis:
1. Change of cause-title in the appeal:
The Appellant filed an appeal assailing an Order-In-Original passed by the Commissioner, Central Excise & Service Tax, Meerut. Initially filed in the name of one entity, a miscellaneous application was submitted for a change in cause-title due to an amalgamation. The change was allowed, and the appeal proceeded under the new entity's name.

2. Disallowance of CENVAT credit on input services:
The dispute revolved around the disallowance of CENVAT credit on diesel and electricity charges paid to a tower company for infrastructure support services. The audit noted discrepancies in availing Cenvat credit, leading to a Show Cause Notice proposing a substantial service tax demand. The impugned Order-In-Original confirmed the demand, ordered recovery, interest, and imposed penalties. However, the Tribunal's precedent in a similar case held that CENVAT credit should be allowed on input services, overturning the demand, interest, and penalties.

3. Demand of service tax, interest, and penalty:
The impugned order demanded significant amounts of CENVAT credit, interest, and penalties from the Appellant. However, the Tribunal, citing a previous decision, set aside the order, allowing the appeal and providing consequential relief to the Appellant. The Tribunal's decision was based on the principle that CENVAT credit should be allowed on input services, such as diesel and electricity, used in providing output services, aligning with the Appellant's case.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal and providing relief to the Appellant based on the precedent that CENVAT credit should be allowed on input services. The decision highlighted the importance of correctly assessing CENVAT credit eligibility on input services, such as diesel and electricity, in the context of providing output services.