2018 (2) TMI 906 - AT - Central Excise

CENVAT credit - input services - services distributed by Head Office as ISD - business auxiliary services - business promotion services - event management services - courier services - Architect, design and interior decorator services - Industrial construction services - Tours and travel services - Repair and maintenance services - Photography and video shooting services - Insurance services - Mandap keeper/real estate agent services - photocopy services - Canteen services. Held that - the credit eligibility on these input services has been subject matter of various decisions and as per the findings recorded, it is clear that on principle the denial of credit on such services is not sustainable. Wherever the documentary verification, as per the original invoices which are received by the appellant on which they have claimed credit, can be done by the Jurisdictional Service Tax Authorities to their satisfaction to note the correct quantum and correctness of original documents. While in principle the appellant is eligible for credit for all these input services, the verification of records wherever required can be done by the Jurisdictional Authority of the appellant - appeal allowed by way of remand.

Summary

Issues:
Dispute over eligibility of appellant for credit of various input services under Cenvat Credit Rules, 2004 for different periods.

Analysis:
1. The appeals revolve around the eligibility of the appellant for credit of various input services under the Cenvat Credit Rules, 2004 for different periods. The dispute encompasses 13 input services, including services like business auxiliary, event management, courier, architect, design, repair, insurance, and canteen services. The appellant, engaged in manufacturing chassis for commercial vehicles, avails credits on these services but faced denial by the Revenue, citing reasons such as change in the definition of input services in 2011 and non-availability of original invoices for services distributed by the Input Service Distributor (ISD).

2. The appellant's counsel argued that similar disputes were previously adjudicated in the appellant's favor by the Original Authority and the CESTAT. The counsel highlighted that the denial of credit for the 13 input services in the current period contradicts the earlier decisions. The appellant contended that as a recipient of ISD services, they are not obligated to produce original invoices, as the central authority receives and distributes such documents as per prescribed procedures.

3. The appellant presented judicial orders from various High Courts and Tribunals supporting their claim for credit on similar input services. These orders demonstrated that denial of credit on these services is not sustainable. The counsel emphasized that the appellant's eligibility for credit is in line with previous decisions and legal precedents, urging the Tribunal to uphold their claim.

4. The Revenue argued that the appellant must establish the actual payment of service tax and provide supporting evidence regarding the nature of services received through original invoices. The absence of such documentation led the Revenue to reject the appellant's claim for credit. However, the Tribunal noted that the issue of input services credit had been previously addressed in the appellant's favor by the same Original Authority, and the Revenue had accepted those decisions in a subsequent order.

5. After hearing both parties and examining the case records, the Tribunal found that the denial of credit on the 13 input services was not sustainable. The Tribunal emphasized the need for documentary verification by the Jurisdictional Service Tax Authorities to ensure the correctness of original documents and the quantum claimed by the appellant. Consequently, the Tribunal ruled in principle that the appellant is eligible for credit on all the disputed input services, subject to verification by the Jurisdictional Authority where necessary.

6. In conclusion, the Tribunal disposed of the appeals by affirming the appellant's eligibility for credit on the input services in question, with the condition that the Jurisdictional Authority may conduct verification of records as needed.