2018 (1) TMI 344 - AT - Central Excise

CENVAT credit - input services - whether the service tax paid on various input services listed out at Para two of the show cause notice dated 18.09.2014 are admissible to credit? - input services in relation to dismantling, replacement, repair or installation of existing pipes and tubes, chemical vessels, relating to chemical equipments, tanks etc. - Held that - Except the amount of credit availed against these services rendered in their township, the credit availed on the service tax paid on all other services are admissible. Since, major portion of the demand are decided in favor of the appellant, therefore, there is no justification for imposition of penalty for the credit availed in relation to Maintenance of Gardening and Construction of Work in the township which has been accepted by the appellant to be payable, and interest is also required to be paid on the said inadmissible credit. To ascertain the amount of credit involved on the Gardening Services and Civil Construction Services rendered in the township, and the correct amount of credit involved in the input invoice claimed to be ₹ 79,192/- and not ₹ 8,48,048/-, the matter is remanded to the adjudicating authority. Appeal allowed by way of remand.

Summary

Issues:
Admissibility of service tax paid on various input services.

Analysis:
The appeals were filed against orders-in-appeal passed by the Commissioner (Appeals) of Central Excise, Customs, and Service Tax, Vadodara-I. The main issue was whether the service tax paid on specific input services listed in the show cause notice was admissible for credit. The appellant's advocate argued that certain services like dismantling of equipment, cleaning services, housekeeping services, gardening and designing work, and other horticulture services were essential for maintaining the factory premises and fell under the definition of 'input services'. The advocate cited relevant tribunal judgments to support their claim. However, they acknowledged that certain services like gardening work in the township were not admissible for credit. The advocate also disputed the amount of credit shown against some services. On the other hand, the Revenue's representative supported the findings of the Commissioner (Appeals).

The Tribunal found that most of the services for which service tax was paid qualified as 'input services' as defined under Rule 2(l) of CCR, 2004 based on previous tribunal judgments. The Revenue did not present any contradictory judgments. The Tribunal noted discrepancies in the amount of credit availed against certain services and agreed with the appellant's advocate that adjustments were needed. It was acknowledged that gardening and maintenance services in the colony and civil maintenance work in the township were not eligible for credit. The Tribunal decided in favor of the appellant for most services, except those related to gardening and construction work in the township. Consequently, penalties were not justified for the credit availed on other services. The matter was remanded to the adjudicating authority to determine the correct amount of credit involved in specific services and to address the inadmissible credits properly.

In conclusion, the appeals were disposed of with the decision that the credit availed on most services was admissible, except for specific instances related to gardening and construction work in the township. The case was remanded for further clarification on the amount of credit involved in certain services and adjustments to be made accordingly.