2019 (3) TMI 107 - AT - Central Excise

CENVAT Credit - input service - GTA Service - place of removal - Held that - In the present case as per the purchase orders, the appellant is supposed to supply the goods at the buyer s premises and the price of the goods include outward freight - the various circular issued by the Board in the year 2007, 2014 clearly show that evidences of the parties is to be ascertained as to when the property in the goods passes along with the other documents i.e. purchase order, invoices etc. Hon ble Supreme Court in the case of Ultra Tech Cement 2018 (2) TMI 117 - SUPREME COURT OF INDIA has held that Cenvat Credit on goods transport agency service availed for transport of goods from place of removal to buyer s premises was not admissible to the respondent - the subsequent Circular issued in 2018 does not help the appellant because once the Hon ble Apex Court has declared the law, the Circular issued by the Board cannot override the judgment of the Apex Court - thus, credit not allowed. CENVAT Credit - CHA Service - Held that - The services rendered by CHA falls under the definition of input service and therefore the appellants are entitled to the CENVAT credit on CHA services - credit allowed. CENVAT credit - insurance service - Held that - Perusal of the amendment in the input service w.e.f. 01/04/2011, it is found that General Health insurance is excluded from the definition of input service - credit not allowed. Extended period of limitation - penalty - Held that - There were divergent views during the period in dispute on the issue, therefore the allegation of suppression with intent to evade payment of duty is not sustainable - the demand beyond the normal period of limitation is set aside as there was no intention to evade payment of duty - penalty also not sustainable. Appeal allowed in part.

Issues Involved:
1. Credit of service tax on hotel accommodation services
2. Irregular availing of cenvat credit on input services
3. Nexus between input services and dutiable final products
4. Place of removal for goods transport services
5. Entitlement to cenvat credit on CHA services
6. Cenvat credit on insurance services
7. Imposition of penalty and extended period of limitation

Detailed Analysis:

1. Credit of Service Tax on Hotel Accommodation Services:
The appeal challenged an order allowing a credit of ?7,245 on hotel accommodation services while confirming a demand of ?20,41,716 along with interest and imposing a penalty of ?1,50,000. The appellant contended that the impugned order was contrary to facts and law, presenting documents for consideration. However, the Tribunal upheld the decision on this issue.

2. Irregular Availing of Cenvat Credit on Input Services:
The Department found irregular availing of cenvat credit amounting to ?34,80,886 by the appellants. The appellants claimed they missed availing credit on eligible input services in the past, including repair & maintenance services, housekeeping services, and service tax paid on reverse charge mechanism. The Tribunal noted that irregular credit was availed without valid documents, leading to a demand for recovery with interest and penalty.

3. Nexus Between Input Services and Dutiable Final Products:
The appellants explained the nexus between input services like telephone/mobile services, hotel accommodation services, and outward transportation services with their dutiable final products. However, the Tribunal found that certain input services lacked a nexus with the output services, resulting in disallowed credits and confirmed demands.

4. Place of Removal for Goods Transport Services:
The issue revolved around the place of removal for goods transport services, specifically the entitlement to cenvat credit on GTA services up to the buyer's premises. Citing judicial precedents, the Tribunal held that credit on GTA services for transport to the buyer's premises was not admissible, as per the decision in the case of Ultra Tech Cement.

5. Entitlement to Cenvat Credit on CHA Services:
Regarding CHA services, the Tribunal determined that the services rendered fell under the definition of input services, entitling the appellants to cenvat credit on CHA services.

6. Cenvat Credit on Insurance Services:
The Tribunal examined the entitlement to cenvat credit on insurance services, concluding that the appellant was not entitled to credit on insurance services due to exclusions in the definition of input services, as per the amendment effective from 01/04/2011.

7. Imposition of Penalty and Extended Period of Limitation:
The Tribunal found that there were divergent views during the disputed period, leading to the conclusion that the allegation of suppression with intent to evade duty was not sustainable. Consequently, the demand beyond the normal limitation period was set aside, and penalties imposed were also deemed unsustainable and set aside.

In conclusion, the appeal was disposed of with the Tribunal upholding the demand for the normal period with interest while setting aside the penalties imposed on the appellant.

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