2018 (10) TMI 703 - AT - Service Tax

Restoration of appeal - appellant made a request for adjournment of the appeal, which was posted on 5.5.2016. However, the Tribunal has taken the matter for disposal and passed the exparte order - Held that - Since the appellant had diligently prosecuted the matter and had taken steps to request for adjournment of the matter, the final order passed disposing the appeal exparte requires to be recalled. CENVAT Credit - input services - panthal and shamiana services - services availed in the eve of inauguration of their new building / branch - appellant is engaged in banking and financial services - Held that - The panthal and shamiana services availed by the appellant is essential for promotion of banking and financial services. The said services are utilized by the appellant to inform the public that a new branch has been started in the said place - credit allowed - Appeal allowed - decided in favor of appellant.

Summary

Issues: Restoration of appeal due to exparte order & Disallowance of CENVAT credit on panthal and shamiana services

Restoration of Appeal:
The appellant filed an application for restoration of appeal as it was disposed of by an exparte order dated 5.5.2016. The appellant's counsel submitted that they had requested an adjournment by speed post on the same day, supported by proof of delivery and a copy of the adjournment letter. The Tribunal had not considered their request for adjournment, leading to the exparte decision. The appellant relied on the decision of the Hon'ble Supreme Court in J.K. Synthetics Ltd. Vs. Collector of Central Excise. The ld. AR opposed the restoration application, stating that since the appeal was disposed of on merits, restoration cannot be allowed. After hearing both sides, the Member (Judicial) found that the appellant had diligently pursued the matter and requested an adjournment, thus ordering the recall of the exparte order and restoring the appeal.

Disallowance of CENVAT Credit:
Regarding the merits of the appeal, the issue revolved around the disallowance of CENVAT credit on panthal and shamiana services. The appellant, engaged in banking and financial services, availed these services for the inauguration of a new building/branch. The appellant argued that these services were essential for providing banking and financial services as they helped in attracting customers and informing the public about the new branch. The ld. AR contended that there was no nexus between the input services and the output services, justifying the disallowance of credit. After hearing both parties and examining the records, the Member (Judicial) concluded that the panthal and shamiana services were indeed essential for promoting banking and financial services. These services aided in attracting customers and informing the public about the new branch, justifying the allowance of CENVAT credit. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

In conclusion, the judgment addressed the restoration of the appeal due to an exparte order and the disallowance of CENVAT credit on specific services, providing detailed reasoning and analysis for each issue involved.