2016 (11) TMI 858 - AT - Central Excise

Denial of CENVAT credit - various input services - Held that - accommodation services, convention service, design services, mandap keeper services, works contract services, interior decorator services, restaurant services, public relations services and general insurance service were allowed by the adjudicating authority vide Order-in-original dt. 30/06/2016 for the subsequent period. Further in respect of air travel services and other services in the appellant s own case, the Commissioner(Appeals) vide order No. 124&125/2013 dt. 15/11/2013 has allowed the credit. The learned counsel has also relied upon the judgment rendered in the case of M/s. Reliance Industries Ltd. Vs. CCE&ST, LTU, Mumbai 2016 (8) TMI 123 - CESTAT MUMBAI wherein the co-ordinate Bench of the Tribunal has allowed the credit on all the services which are in dispute in the present case. It has also to be mentioned that the Department has no case that the services were used for personal consumption of any employee of the appellant. In view thereof following the view taking in the above decisions, I hold that the denial of credit is unsustainable.

Summary

Issues Involved:
Denial of CENVAT credit on input services.

Analysis:
The appeal dealt with the denial of CENVAT credit on input services by the appellants, who are engaged in the manufacture of bulk drugs and drug intermediates. The original authority allowed a partial amount of credit but disallowed credit for 16 specific services, demanding recovery of a substantial sum along with interest and imposing a penalty. The appellants, aggrieved by this decision, appealed to the first appellate authority, which upheld the original order, leading to the current appeal before the Appellate Tribunal CESTAT HYDERABAD.

The appellant's counsel presented a detailed breakdown of the inadmissible credit for various services, such as accommodation services, air transport, convention services, director's sitting fees reimbursement, design services, mandap keeper services, works contract services, event management, foreign exchange broker, interior decorator services, restaurant services, banquet services, authorized service station service, club membership services, public relations services, insurance auxiliary service, and subscription service. The counsel clarified that certain amounts were not pressed due to duplication claims or being covered under a separate show-cause notice, limiting the current claim to a specific amount. The counsel argued that credit for several services had been allowed in subsequent periods or in the appellant's own case by the Commissioner(Appeals), citing relevant judgments and emphasizing that the services were not used for personal consumption by any employee.

In light of the arguments presented and the precedents cited, the tribunal found the denial of credit to be unsustainable. The impugned order disallowing the credit on input services was set aside, and the appeal was allowed with any consequential reliefs deemed necessary.