2014 (5) TMI 841 - AT - Service Tax

Availment of inputs credit - Service tax paid on mining, survey and map makings services availed in the appellants mines located away from the factory premises, for excavation of lignite - Held that - appellant has placed on record the evidence showing that the amount in question were captive mines, having been specifically allocated to them but the lower authorities have not verified the said aspect - Following decision of Vikram Cement vs. CCE, Indore 2006 (2) TMI 1 - Supreme court as also Madras High Court decision in the case of Deepak Fertilizers & Petrochemicals Corpn. Ltd. vs. CCE, Belapur 2013 (4) TMI 44 - BOMBAY HIGH COURT - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Dispute over availment of input credit for service tax paid on mining, survey, and map making services for excavation of lignite located away from factory premises.

Analysis:
The judgment by Ms. Archana Wadhwa of the Appellate Tribunal CESTAT New Delhi addresses the issue of availment of input credit for service tax paid on services related to mining, survey, and map making for lignite excavation away from the factory premises. The original adjudicating authority disallowed the credit, stating that services away from the factory gate are not covered by the definition of input services. The Commissioner (Appeals) upheld this decision, emphasizing that services for power generation, a separate activity, cannot be considered as input services. The appellant cited the Supreme Court decision in Vikram Cement vs. CCE, Indore and the Madras High Court decision in Deepak Fertilizers & Petrochemicals Corpn. Ltd. vs. CCE, Belapur to support their case. The appellant also provided evidence that the mines in question were captive mines specifically allocated to them, which the lower authorities failed to verify.

The tribunal found merit in the appellant's arguments and decided to set aside the impugned order. The matter was remanded to the original adjudicating authority for fresh adjudication in line with the legal principles established in the cited decisions and for verification of the factual aspects. Ultimately, the appeal was allowed by way of remand, highlighting the importance of proper verification and adherence to legal precedents in such cases.

This judgment underscores the significance of correctly interpreting the definition of input services in the context of tax credit availment, as well as the need for thorough examination of factual evidence to make informed decisions. It also emphasizes the role of legal precedents in guiding such tax-related disputes and the authority's responsibility to ensure proper verification before making determinations.