9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (3) TMI 1064 - AT - Service TaxCENVAT credit on service tax paid on input services related to passenger service fee development fee and user development fee - appellant is engaged in providing air transportation services - HELD THAT - The ruling by Hon ble Bombay High Court in the case of CCE Pune V/s. Ajinkya Enterprises 2012 (7) TMI 141 - BOMBAY HIGH COURT was passed in the year 2012 and appellant had not chosen to rely on the same in the year 2016 before original authority. By following above stated ruling by Hon ble Bombay High Court it is held that even if someone has involved in any activity which does not amount to provision of service still if Service tax paid on such activity is accepted by Revenue then CENVAT credit of service tax paid on input services going into such activity cannot be denied. The contention of appellant that service tax was paid was not denied by the Revenue during the hearing but details of the service tax paid by appellant during the period of dispute is not readily forthcoming from the appeal record. Therefore it cannot be ascertained as to whether service tax paid by the appellant was more than or equal to cenvat credit availed. Conclusion - The matter needs to be remanded to original authority with a direction to the appellant to file a copy of ruling by Hon ble Bombay High Court in the case of CCE Pune V/s. Ajinkya Enterprises before the original authority who shall verify whether service tax paid by the appellant during the relevant period was equal to or more than the cenvat credit availed by the appellant. Appeal allowed by way of remand.
ISSUES PRESENTED and CONSIDERED
The core legal issue considered in this judgment was whether the appellant, engaged in providing air transportation services, was entitled to avail CENVAT credit on service tax paid on input services related to passenger service fee, development fee, and user development fee. The Revenue contended that these services were provided by the airport authority and not by the appellant, thus questioning the appellant's eligibility for CENVAT credit. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents The legal framework primarily involved the interpretation of CENVAT credit rules under the Finance Act, 1994, and the Airports Authority of India Act, 1994. The appellant relied on the precedent set by the Bombay High Court in the case of Commissioner of Central Excise, Pune v. Ajinkya Enterprises, which held that once tax is accepted by the Revenue, the CENVAT credit cannot be denied, even if the activity does not amount to manufacture or service provision. Court's Interpretation and Reasoning The Tribunal considered the appellant's argument that although they were not required to pay service tax on the fees in question, they had done so, and the Revenue accepted this payment without offering a refund. Consequently, the appellant argued they should be entitled to CENVAT credit on the input services. The Tribunal noted the reliance on the Ajinkya Enterprises case, emphasizing that if the Revenue accepts the tax, it cannot subsequently deny the corresponding credit. Key Evidence and Findings The Tribunal acknowledged that the appellant had paid service tax on the fees collected and had not sought a refund. However, the records did not clearly indicate whether the service tax paid was equal to or exceeded the CENVAT credit availed, which was crucial for determining the appellant's entitlement to the credit. Application of Law to Facts The Tribunal applied the principle from the Ajinkya Enterprises case, stating that if the service tax paid by the appellant was equal to or more than the CENVAT credit availed, the credit should be allowed. The lack of clarity in the records regarding the amount of service tax paid necessitated further examination by the original authority. Treatment of Competing Arguments The Tribunal considered the Revenue's position that the airport authority, not the appellant, provided the services. However, it found that since the Revenue accepted the service tax payments made by the appellant, the denial of CENVAT credit would be inconsistent with the precedent set by the Bombay High Court. Conclusions The Tribunal concluded that the matter required remand to the original authority to verify whether the service tax paid by the appellant matched or exceeded the CENVAT credit claimed. If so, the credit should be granted to the appellant. SIGNIFICANT HOLDINGS The Tribunal held that the principle established in the Ajinkya Enterprises case was applicable, emphasizing that acceptance of tax payments by the Revenue precludes denial of corresponding CENVAT credit. This principle was articulated as follows: "By following above stated ruling by Hon'ble Bombay High Court, we hold that even if someone has involved in any activity which does not amount to provision of service, still if Service tax paid on such activity is accepted by Revenue then CENVAT credit of service tax paid on input services going into such activity cannot be denied." The final determination was to remand the case to the original authority for de novo adjudication, directing the appellant to provide evidence of the service tax paid during the relevant period. The original authority was instructed to compare this with the CENVAT credit availed and make a fresh decision based on this verification.
|
