2015 (10) TMI 2359 - AT - Service Tax

Liability of Service Tax - Revenue states that appellant took CENVAT credit equal to said amount on various services which could not be considered to be input services - Appellant contends that credit on bank charges by bank is eligible as decided in case of Meghamani Dyes & Intermediates Ltd. vs. CCE, Ahmedbad 2014 (1) TMI 558 - CESTAT AHMEDABAD - Credit on Insurance charges and Taxi charges has been allowed in various judgements - Credit i.r.o. Warehousing Rent and Commission charges has been allowed in case of Danmet Chemicals P. Ltd. vs. CCE, Mumbai 2013 (2) TMI 590 - CESTAT MUMBAI and Zinser Textiles Systems Pvt. Ltd. vs. CCE, Ahmedabad 2014 (6) TMI 133 - CESTAT AHMEDABAD respectively - Further contended that extended period is not invocable as there was no intention on part of appellant to take inadmissible CENVAT credit as credit taken was duly reflected in ST-3 return. Held That - Cases cited covers the issue in Appellant s favour - Allegation of suppression cannot be sustained as there is force in contention of appellant that credit taken was duly reflected in ST-3 return - Decided in favour of Appellant.

Issues involved:
1. Stay application against service tax demand confirmation.
2. Eligibility of cenvat credit on bank charges.
3. Allowance of cenvat credit on insurance charges.
4. Cenvat credit on taxi charges.
5. Cenvat credit on warehousing rent.
6. Citing judgment on commission charges.
7. Invocation of extended period for inadmissible cenvat credit.

Analysis:
1. The appellant filed a stay application and appeal against the confirmation of a service tax demand. The demand was for an amount of Rs. 88,51,090, including interest and penalties, due to the appellant taking cenvat credit on services deemed not to be input services.

2. The appellant contended that cenvat credit on service tax paid on bank charges is eligible based on a precedent set in the case of Meghamani Dyes & Intermediates Ltd. vs. CCE, Ahmedabad 2013 (32) STR 671 (Tri. Ahmd.).

3. Regarding cenvat credit on insurance charges, the appellant cited judgments such as CCE, Raipur vs. Raipur Rotocast Ltd. 2010 (18) STR 466 (Tri.Del.), KPMG vs. CCE, New Delhi 2014 (33) STR 96 (Tri.Del.), and CCE, Raipur vs. Beekay Engg. & Casting Ltd. 2009 (16) STR 709 (Tri.Del.) to support their claim.

4. The appellant argued in favor of cenvat credit on taxi charges, referring to judgments like CCE, Jaipur-II vs. J.K. Cements Works 2012 (277) ELT 194 (Tri. Del.) and CCE, Raipur vs. Beekay Engg. & Casting Ltd. 2009 (16) STR 709 (Tri. Del.).

5. Concerning cenvat credit on warehousing rent, the appellant relied on the decision in Danmet Chemicals P. Ltd. vs. CCE, Mumbai 2013 (30) STR 308 (Tri. Mum) to support their claim for input credit related to output services.

6. The appellant cited the judgment in the case of Zinser Textiles Systems Pvt. Ltd. vs. CCE, Ahmedabad 2014 (33) STR 301 (Tri. Ahmd.) regarding commission charges.

7. The appellant argued against the invocation of the extended period for inadmissible cenvat credit, stating that there was no intention to misuse the credit, and the utilization was accurately reflected in the ST-3 returns. They referenced judgments like Hero Motocorp Ltd. 2014 (36) STR 1128 (Tri. Del.) to support their position.

The Tribunal found merit in the appellant's contentions, noting that the cited cases favored the appellant. They also acknowledged that the credit utilization was duly reflected in the returns, leading to the conclusion that there was no suppression or willful misstatement. Consequently, the Tribunal ruled in favor of the appellant, waiving the pre-deposit requirement and stay recovery until the appeal's disposal.

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