2017 (11) TMI 1448 - AT - Service Tax

CENVAT credit - outdoor catering services after 01.04.2011 - Held that - the Cenvat credit on outdoor catering services pertains to the period prior to 01.04.2011 but the appellant has availed the credit after 01.04.2011 - the Board circular dated 29.04.2011 clarifies that the credit on such services shall be available when the services have been completed before 01.04.2011. This means that where the services have been fully received prior to 01.04.2011, the credit of service tax paid on the services is available even though payment was made on or before 01.04.2011 - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Cenvat credit eligibility on various services.
2. Disallowance of credit on outdoor catering services post 01.04.2011.

Analysis:
1. The appellant appealed against an order disallowing Cenvat credit on certain services. The Commissioner (A) allowed credit on housekeeping, pest control, and gardening services but disallowed credit on outdoor catering services after 01.04.2011, along with interest and penalty. The appellant, engaged in various services, availed Cenvat credit on service tax paid on different services and capital goods as per the Cenvat Credit Act, 2004. A show cause notice was issued demanding recovery of inadmissible credit, which was confirmed by the Asst. Commissioner, leading to the appeal.

2. The Commissioner (Appeal) allowed credit on certain services but denied credit on outdoor catering post 01.04.2011, citing a notification excluding outdoor catering services as input services after the specified date. The appellant argued that all outdoor catering services were received before 01.04.2011, and they availed the credit after that date, referring to circulars and legal precedents supporting their claim. The tribunal, after considering the evidence, found that the appellant indeed received the outdoor catering services before 01.04.2011, and the circular clarified that credit on such services would be available if the services were completed before the specified date. Relying on a previous decision involving a similar issue, the tribunal allowed the appeal, setting aside the impugned order.

This judgment highlights the importance of considering the timing of service receipt and completion concerning Cenvat credit eligibility, as well as the relevance of circulars and legal precedents in interpreting tax laws and regulations.