2010 (7) TMI 232 - AT - Service Tax

Cenvat Credit - The original authority denied the credit of Rs. 3, 19, 302 and order recovery of the same along with interest and imposed equal amount as penalty. Commissioner (Appeals) partly allowed the appeal. The assessee contended that substantial part of the demand relates to Service Tax paid on insurance premium which was alleged to be relating to cars. The Service Tax credit taken relating to insurance of cars was to the tune of about Rs. 27, 000 only and rest of the credit relates to other insurance services. Held that - order of Commissioner (Appeals) insofar as same related to denial of credit and imposition of equal amount of penalty was to be set aside and matter was to be remanded to original authority for re consider claim of assessee.

Summary

Issues: Denial of credit, recovery of amount, imposition of penalty, remand to original authority for consideration of claim

Denial of Credit:
The original authority denied the credit of Rs. 3,19,302 related to Service Tax paid on insurance premiums. The Commissioner (Appeals) partly allowed the appeal, confirming a demand of Rs. 1,98,675 along with interest and upholding the penalty of an equal amount. The appellants' advocate highlighted that a substantial part of the demand was for Service Tax on insurance premiums related to various aspects such as plant, machinery, electrical insulation, building, power plant, and machinery breakdown, not just cars. However, this information was not presented before the original authority or the Commissioner (Appeals).

Remand to Original Authority:
Considering the facts and circumstances, the Tribunal set aside the Commissioner (Appeals) order regarding the denial of credit and penalty imposition. The matter was remanded to the original authority for reconsideration of the appellants' claim. The appellants were instructed to provide evidence supporting their claim within 45 days. The original authority was directed to issue a decision within 2 months after the deadline for the submission of defense replies by the appellants, ensuring a reasonable opportunity for a hearing.

Conclusion:
The appeal was allowed through remand for further consideration by the original authority, with the stay petition also being disposed of in the process. The decision aimed to address the lack of specific information presented earlier and provide a fair opportunity for the appellants to support their claim regarding the denied credit, thereby ensuring a just outcome in the interest of justice.