2016 (9) TMI 280 - AT - Central Excise

Invokation of extended period of limitation - Cenvat credit to recipient of service - service tax paid to the tour operator for arranging transport facility for travelling of the employees from residence to factory and vice-versa - non-disclosure of credit particulars with regard to the disputed service in ER-1 returns - Held that - the issue is no more res integra in view of various judgement. Since the issue arising out of the present dispute is no more open for any debate, we are of the considered view that the service tax paid on such taxable service shall be available for CENVAT credit. Since taking of CENVAT credit on the disputed service is permissible under the statute on merits, setting aside the adjudication order by the Commissioner (Appeals) on the ground of limitation, in our opinion, will not have any consequence for the Revenue, because on merits, the assessee is entitled to take CENVAT credit on the disputed service. It is found that filing of appeal by the respondent/assessee is not in conformity with Section 35B of Central Excise Act, 1944 in-as-much-as the Commissioner (Appeals) vide impugned order has allowed the appeal with consequential relief. Since the respondent/assessee is not aggrieved by the impugned order, the appeal filed by it is not maintainable. Therefore, the appeal filed by the respondent/assessee is dismissed. - Appeals disposed of

Issues:
1. Appeal against the order passed by the Commissioner of Central Excise (Appeals), Indore.
2. Dispute regarding the availability of CENVAT credit for service tax paid on a specific service.
3. Applicability of limitation in setting aside the adjudication order.

Analysis:

1. The appeal before the Appellate Tribunal CESTAT NEW DELHI involved challenges from both the Revenue and the assessee against the order issued by the Commissioner of Central Excise (Appeals), Indore. The Revenue contended that the respondent had not disclosed credit particulars related to a disputed service in the ER-1 returns, and the Department discovered this during an audit, alleging suppression of facts to wrongfully avail CENVAT credit. The Revenue argued that proceedings initiated for recovery of wrongly availed credit within the extended period of limitation were justified.

2. The Respondent, on the other hand, argued that the CENVAT credit for service tax paid on the disputed service was legitimate under Rule 2(l) of the CENVAT Credit Rules, 2004. To support this claim, the Respondent cited specific judgments, including those of CCE, Chandigar-II Vs. Federal Mogul Goetze (India) Ltd., CCE, Bangalore-I Vs. Interplex Electronics India Pvt. Ltd., and CCE, Bangalore-III Vs. Stanzen Toyotetsu India (P) Ltd.

3. After hearing both sides and reviewing the records, the Tribunal addressed the issue of whether the service tax paid to a tour operator for employee transportation should be eligible for CENVAT credit. The Tribunal noted that the matter had been settled in previous judgments cited by the advocate, concluding that the service tax on the taxable service should indeed be available for CENVAT credit. Therefore, setting aside the adjudication order by the Commissioner (Appeals) on the grounds of limitation was deemed inconsequential for the Revenue, as the assessee was entitled to the credit on the merits.

4. However, the Tribunal found that the appeal filed by the respondent/assessee was not in line with Section 35B of the Central Excise Act, 1944, as the Commissioner (Appeals) had already allowed the appeal with consequential relief. Since the respondent was not aggrieved by the impugned order, the appeal was deemed not maintainable, leading to its dismissal.

5. In conclusion, the Tribunal disposed of the appeals filed by both parties, maintaining that the service tax paid on the disputed service was eligible for CENVAT credit, and dismissing the appeal filed by the respondent/assessee due to lack of conformity with the relevant legal provisions.

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