2019 (5) TMI 469 - AT - Service Tax

CENVAT Credit - input services - air travel agent tour operator services - life insurance/general insurance services - rent-a-cab services - period from April, 2008 to March, 2013 - HELD THAT - A bunch of documents had been brought by the learned Counsel for the appellant to substantiate that those services were used for providing output services which are in the nature of providing Market Research Services to the clients and not for personal use of its employees but the authorities below had not taken strain in inspecting those documents before given their respective findings. It is a fit case which requires to be re-adjudicated by the Adjudicating Authority - appeal allowed by way of remand.

Summary

Issues:
Challenge of inadmissibility of CENVAT credit on various services, failure to establish correlation between input and output services, exclusion of services post introduction of negative list, need for re-adjudication by Adjudicating Authority.

Analysis:
The appellant challenged the inadmissibility of CENVAT credit on air travel agent & tour operator services, life insurance/general insurance services, and rent-a-cab services for the period from April 2008 to March 2013. The challenge arose from an EA Audit in October 2013, resulting in the imposition of duty liability, interest, and penalties by the Adjudicating Authority. The Commissioner (Appeals) upheld most of the decision, except for the penalty under Section 76. The primary ground for the confirmation of duty demand was the appellant's failure to produce documents establishing the correlation between input and output services and to prove that the services were not for personal use or consumption by employees.

During the appeal, the appellant's counsel submitted that the services were used for providing Market Research Services to clients and not for personal use of employees. The respondent-department argued that post introduction of the negative list, these services were excluded from CENVAT credit availment. The Tribunal noted that the appellant had not produced evidence before the authorities to substantiate the eligibility for CENVAT credit. However, during the hearing, the appellant presented documents showing employee travel for official purposes, which had not been considered by the authorities below. The Tribunal found it necessary to re-adjudicate the case.

The appeal was allowed by way of remand to the original Adjudicating Authority for re-adjudication. The order of the Commissioner of Central GST & Central Excise was set aside, and the appellant was directed to produce necessary documents. If any duty demand is confirmed, the penalty aspect was to be examined with reference to specific decisions. The Tribunal emphasized the need for proper documentation to establish the eligibility for CENVAT credit and ordered a re-adjudication of the case by the Adjudicating Authority.