2010 (2) TMI 532 - AT - Service Tax

Cenvat Credit of Service Tax Input Service Cab services for officials of company for their timely completion of job. Held that- assessee is entitled to take credit of service tax paid thereon. Landline phones installed in residence of Director and officials of assessee company. Held that Cenvat credit of tax paid on such service was admissible as bills thereof were paid by assessee company. Held that -professional charges of Chartered Accountant are directly related to business and assessee is entitled to credit of service tax paid thereon.

Summary

Issues:
1. Reversal of Cenvat credit on service tax paid on cab services, telephones, and professional charges.
2. Interpretation of input services under Cenvat Credit Rules, 2004.
3. Eligibility of Cenvat credit on services provided to employees for personal comfort.
4. Admissibility of Cenvat credit on professional charges paid to Chartered Accountants.

Analysis:
1. The Commissioner (Appeals) allowed the appeals filed by the assessee, setting aside the Orders-in-Original confirming the reversal of Cenvat credit on cab services, telephones, and professional charges. The Commissioner held that cab services were essential for timely job completion, thus not akin to GTA services. The bills for telephones paid by the company were deemed eligible for Cenvat credit. The services in question were considered input services under Rule 2(l) of Cenvat Credit Rules, 2004, related to the business of the appellant, and hence, the credit was allowed. The Commissioner's order was based on the absence of contrary evidence from the department, leading to the conclusion that the credits were rightly available to the appellants.

2. The Revenue appealed against the Commissioner's order, arguing that the services were not used in or in relation to the manufacture of goods, rendering the credit ineligible. The Jurisdictional Assistant Commissioner observed that the services were for personal comfort, lacking a specific relation to manufacturing activities as per the Cenvat Credit Rules. The Revenue contended that the appellants failed to provide evidence linking the services to the definition of "Input Services." The Revenue's position was that the services were not authentic for manufacturing purposes, and the nexus between the services and manufacturing activities was insufficient, making the credit ineligible under the Cenvat Credit Rules.

3. The Tribunal, after considering submissions from both sides and reviewing relevant precedents, found that the issue had been settled in favor of the assessee in previous decisions. The eligibility of Cenvat credit on telephone services and rent-a-cab services had been established in prior cases. The Tribunal noted that professional charges paid to Chartered Accountants were directly related to the business. Based on the settled precedents and lack of contrary decisions, the Tribunal upheld the Commissioner's orders, concluding that the appeals filed by the Revenue were to be rejected.

In conclusion, the judgment affirmed the eligibility of Cenvat credit on the disputed services, emphasizing the importance of the services for business operations and job completion. The decision was supported by established precedents and the absence of contradictory rulings on the issue.