2017 (10) TMI 1127 - AT - Service Tax

CENVAT credit - input services - Outdoor catering services/canteen services - Rent-a-cab/Tour operator services - Held that - the learned Commissioner have not arrived at any finding that the Outdoor cantering service was provided with respect to any particular employee. It is admitted fact that the service was provided for all the employees in general and further as regards the Outdoor cantering services received during events is concerned, the same is also allowable as such events are meant for business promotion purposes and building of goodwill - also, there is no finding by the learned Commissioner to the contrary, save and except bald allegations - credit allowed. Penalty - Held that - the issue relates to interpretation of the provisions of Cenvat Credit Rules and there is no misconduct or contumacious conduct on the part of the appellant in taking the credits - penalties set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of Cenvat Credit on Outdoor catering services and Rent-a-cab/Tour operator services.

Analysis:
The appellant, engaged in various services, availed Cenvat Credit on input services including Outdoor catering and Rent-a-cab services. The dispute arose from 8 show cause notices proposing denial of credit for various services from April 2005 to March 2015. The Commissioner's Order-in-Original dated 31.03.2017 confirmed denial of credit for Outdoor catering and Rent-a-cab services post-April 2011 due to amendments in the definition of input service. The appellant appealed to the Tribunal challenging the denial of credit.

In the appeal, the appellant conceded the denial of Rent-a-cab service credit post-April 2011 but contested the denial of Outdoor catering service credit. The appellant argued for the deletion of penalties imposed, citing lack of contumacious conduct or mala fide intent. They also requested credit for payments made towards Rent-a-cab services. Regarding Outdoor catering services, the appellant relied on a previous Tribunal decision and various court rulings to support their claim for credit.

The Revenue supported the impugned order, while the Tribunal noted that the Outdoor catering services were provided for all employees and during business promotion events. The Tribunal found no specific findings by the Commissioner to deny the credit for Outdoor catering services, except for bald allegations. Consequently, the Tribunal allowed the appeal in part, directing the allowance of Cenvat credit for Outdoor catering services for the entire period. The denial of Rent-a-cab service credit post-April 2011 was upheld. The Tribunal also directed the Adjudicating Authority to grant adjustments for taxes paid and reconcile claims for tax credit. Additionally, all penalties were deleted due to the lack of misconduct or contumacious conduct by the appellant in claiming credits.