2022 (8) TMI 774 - AT - Service Tax

CENVAT Credit - input services - security agent services - air travel services - hotel stay services - period 2015 to June 2017 - Demand in terms of Rule 14 of Cenvat Credit Rules read with Section 73(2) of the Finance Act, 1994 - HELD THAT - It is found that the same issue for the period 2005, 2014-15 has been considered and finalized by the Commissioner (Appeals) in the remand proceedings in respect of these three services holding the credit is allowed on these services. Since the Commissioner (Appeals) has in the remand proceedings allowed the credit in respect of these services, there are no reason to differ with the order of the Commissioner (Appeals) in the case of the appellant itself - appeal allowed.

Summary

Issues:
- Disallowance of Cenvat credit on input services like security services, travel services, and hotel stay.
- Nexus between input services and output services.
- Admissibility of Cenvat credit based on documentary evidence.

Analysis:
- The appellant, a global processing center, availed Cenvat credit on various services for the period 2015 to June 2017. The issue revolved around the nexus between input services of security agent, air travel, and hotel stay with the output services provided by the appellant. The Commissioner (Appeals) upheld the denial of credit by the adjudicating authority.

- The appellant argued that for the period 2014-15, a similar issue was remanded back to the original adjudicating authority by the Tribunal. The Commissioner (Appeals) subsequently allowed the appeal in their favor, establishing finality on the matter. The appellant contended that this final decision should apply to the current appeal as well.

- The impugned order disallowed Cenvat credit on security services, travel services, and hotel stay charges. Regarding security services, the order emphasized the lack of nexus between the input service and output services, citing the need for prescribed particulars in the documents. The burden of proof regarding admissibility of Cenvat credit was placed on the appellant, who failed to establish the necessary nexus. The order highlighted the importance of establishing a direct connection between the services rendered and the business activities of the assessee.

- Concerning travel services, the order required documentary evidence to establish the purpose of travel for providing output services. It noted the exclusion of activities relating to business from the definition of 'input service' with effect from 1.4.2011. Similarly, for hotel stay charges, the order emphasized the lack of clear nexus between the expenses and business activities, leading to the denial of Cenvat credit. The appellant's submissions lacked adequate justification and collateral documentary evidence to support their claim.

- The impugned order's findings for the period 2005 to 2014-15 on similar services were considered, where the Commissioner (Appeals) allowed the credit in the remand proceedings. Given this precedent, the current appeal was allowed, setting aside the impugned order. The Tribunal did not find any reason to differ with the Commissioner (Appeals) in the appellant's case, ultimately ruling in favor of the appellant.

This detailed analysis highlights the issues of disallowance of Cenvat credit on specific input services and the importance of establishing a clear nexus between input and output services through documentary evidence, ultimately leading to the Tribunal's decision in favor of the appellant based on previous rulings and finality established by the Commissioner (Appeals).