2017 (9) TMI 1442 - AT - Service Tax

CENVAT credit - GTA service - cargo & courier service - club & hotel membership service - Time limitation - Held that - the earlier show-cause notice dated 24.09.2009 was withdrawn by the Revenue and therefore, the said notice is non-est. Hence, there is no force in the submission of the ld.Advocate on limitation. The appellants contested the demand on merits also. It is seen that all these issues on merit were not examined by the lower authorities in proper manner. It is appropriate that the matter should be remanded to the Adjudicating Authority to decide afresh. Appeal allowed by way of remand.

Summary

Issues involved: Appeal against disallowance of Cenvat Credit on service tax for trading activities, invocation of extended period of limitation, and contesting the demand on merits.

Analysis:

Issue 1: Disallowance of Cenvat Credit on service tax for trading activities
- The appellant, engaged in manufacturing, faced disallowance of Cenvat Credit of ?18,78,646 on GTA service, cargo & courier service, and club & hotel membership service.
- The Adjudicating Authority disallowed the credit, stating these services were used for trading off machines without any relation to output services.
- The appellant argued for eligibility of input credit for courier and cargo charges used for spare parts and repair services.
- The matter was remanded to the Adjudicating Authority for a fresh decision after considering the submissions and evidence.

Issue 2: Invocation of extended period of limitation
- Two show-cause notices were issued, one in 2009 and another in 2010, for disallowing Cenvat Credit on services.
- The earlier notice was withdrawn on technical grounds, leading to a contention on the limitation for the subsequent notice.
- The Tribunal held that the withdrawal of the earlier notice rendered it non-est, allowing the subsequent notice within the limitation period.

Issue 3: Contesting the demand on merits
- The appellant contested the demand on merits, highlighting that only 20% of eligible input credit was utilized against courier and cargo charges.
- They also stated non-utilization of credit against GTA service and raised concerns regarding the definition of exempted service.
- The Tribunal noted that the lower authorities did not thoroughly examine these merit-related issues and remanded the matter for a fresh decision.

In conclusion, the appeal was allowed by way of remand, granting the appellant a reasonable opportunity to present their case with evidences. The Tribunal emphasized that all issues were kept open for consideration during the fresh adjudication process.