2017 (3) TMI 843 - AT - Central Excise

CENVAT credit - Business Auxiliary Service - Business Support Service - Photography Service - credit denied without finding relevancy of such service to the business of the appellant - Held that - Both the authorities below did not ask for the evidence from the appellant which shall satisfy them to examine relevancy of the service - Since they have recorded that the evidences were not produced in spite of the specific ground raised by the appellants, the authorities acted whimsically. Therefore, it is high time that the adjudicating authority should appreciate relevancy of the claims on examination of the evidence that shall be produced by the appellant on the date fixed by the adjudicating authority during January 2017 - appeal allowed by way of remand.

Summary

Issues:
Denial of CENVAT credit on Business Auxiliary Service, Business Support Service, and Photography Service without proper examination of relevancy and evidence.

Analysis:
The appellant contended that they were eligible for CENVAT credit on services like Business Auxiliary, Business Support, and Photography, crucial to their business. However, the authorities denied the credit without adequately assessing the relevance of these services. The appellate order highlighted the importance of these services in the appellant's business operations. The authorities only allowed credit for Event Management, failing to justify the denial of credit for the other services based on the lack of documentary proof. The Revenue argued that the orders were proper due to the absence of evidence.

Upon hearing both sides and reviewing the records, it was observed that the authorities did not request evidence from the appellant to evaluate the relevance of the services. The Tribunal noted that the services availed had an integral connection to the nature of the appellant's business. The authorities were criticized for not considering the evidence produced by the appellant and acting arbitrarily. The Tribunal directed the adjudicating authority to appreciate the relevance of the services by examining the evidence to be submitted by the appellant in January 2017. The authority was instructed to communicate the date for evidence submission to the appellant and make a decision based on the facts and evidence presented.

The Tribunal emphasized that the adjudicating authority should carefully consider all evidence and facts presented by the appellant before making a decision. It was stressed that decisions should not be made arbitrarily, especially when the nature of the business indicated a potential need for the services in question. The appellant's counsel argued against imposing penalties, citing no intention to evade taxes. The Tribunal remanded both appeals to the adjudicating authority for a reevaluation based on the provided evidence and relevant considerations, ensuring a fair and thorough examination of the case.