2012 (10) TMI 72 - AT - Service Tax

Cenvat credit - duty paying documents - input services - whether the document certificate issued by the bank is the valid document for availment of Cenvat credit Held that - Since this certificate has been issued to the appellant and it contains the information regarding the nature of the service, gross amount charged for the service and service tax paid - it is valid document - requirement of pre-deposit of Cenvat credit demand, interest and penalty is waived

Summary

Issues:
1. Validity of Cenvat credit availed by the appellant based on a bank certificate.
2. Whether the services received from the bank are covered under the definition of input service for Cenvat credit.

Analysis:
1. The appellant, a manufacturer of AAC/ACSR conductors chargeable to Central Excise Duty, availed Cenvat credit of Rs. 49,683 in August 2008 based on a certificate issued by the bank regarding service tax on banking services. The department contended that the bank certificate was invalid, and the services related to finance and bill retiring were not covered under the definition of input service, leading to a demand for Cenvat credit repayment along with interest and penalty. The Assistant Commissioner's decision was upheld by the Commissioner (Appeals), prompting the appellant to file the present appeal and stay application.

2. During the hearing, the appellant's counsel argued that the services from the bank, including bill retiring and finance, fell within the definition of input service, citing that accounting and financial services were explicitly mentioned in the definition. The counsel emphasized that the bank certificate contained necessary information as required by Rule 4A of the Service Tax Rules, making it a valid document for Cenvat credit. On the other hand, the Senior Departmental Representative opposed the stay application, reiterating the earlier findings that the document supporting the Cenvat credit was invalid.

3. After considering both parties' submissions and reviewing the records, the judge found that the bank certificate issued to the appellant was valid for availing Cenvat credit as it contained essential information about the service nature, charges, and service tax paid. Additionally, the judge opined that the services in question, namely financing and bill retiring, were covered under the definition of input services. Consequently, the judge waived the pre-deposit requirement for the Cenvat credit demand, interest, and penalty, allowing the stay application until the appeal's final disposal.

This judgment from the Appellate Tribunal CESTAT, New Delhi, highlights the importance of valid documentation and the interpretation of input services in the context of Cenvat credit disputes, ultimately favoring the appellant in this case.