2018 (11) TMI 1460 - AT - Service Tax

CENVAT Credit - input services - general insurance - repair and maintenance of motor vehicles and those utilized for staff welfare - Held that - The Order-in-Original confirms the demand without given any specific finding on the admissibility/inadmissibility of individual services covered by the impugned show-cause notice by observing that the assessee had admitted the liability and paid the same along with interest. The assessee had indeed paid liability and informed the Joint/Additional Commissioner on 17.11.2015 about the payment made, however, on 29.2.2015 in its reply to the showcause notice contested all the issues before original adjudicating authority. In these circumstances, the observation of the original adjudicating authority to the effect that the appellants are not contesting the demand is incorrect. The matter is remanded to the original adjudicating authority to give findings with respect to admissibility of credit in each separate head and passing a speaking order after following the principles of natural justice - appeal allowed by way of remand.

Summary

Issues: Denial of CENVAT Credit for services related to general insurance, repair and maintenance of motor vehicles, and staff welfare.

Analysis:
1. The appeal was filed against the denial of CENVAT Credit by M/s Kalpataru Ltd. for services related to general insurance, repair and maintenance of motor vehicles, and staff welfare. The appellant contested the demand confirmed for staff welfare services but argued that specific findings were not provided by the original adjudicating authority and the first appellate authority regarding the services in question. The original adjudicating authority stated that the services lacked nexus with the output service and were excluded from the definition of "input service." The appellant requested a remand to the original adjudicating authority for clear findings on the issue.

2. The Commissioner (Appeals) did not provide specific findings on individual services and upheld the denial of credit based on the changes in the definition of input service without analyzing the specific services involved. The appellant emphasized the lack of detailed findings by both the original adjudicating authority and the first appellate authority for the period 2010 to 2014, indicating that the impugned order was not a speaking order. The appellant argued for a remand to clarify the admissibility of credit for each service.

3. The learned AR supported the impugned order, stating that specific findings were provided from para 25 onwards regarding the services in question. However, the Order-in-Original did not address the admissibility of individual services covered by the show-cause notice, leading to a lack of clarity on the contested issues before the original adjudicating authority.

4. The tribunal noted that the Order-in-Original did not contain specific findings on the admissibility of individual services covered by the show-cause notice. Although the appellant had paid the liability and informed the authority, they contested all issues before the original adjudicating authority. The tribunal found discrepancies in the observations made by the original adjudicating authority and set aside the impugned order. The matter was remanded to the original adjudicating authority to provide detailed findings on the admissibility of credit for each service and to issue a speaking order in accordance with the principles of natural justice.