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TMI Blog2018 (4) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... ther argued that all these expenditure wholly exclusively for the purpose of business. Ld. Counsel argued that service tax paid on insurance, maintenance and repairs of vehicles is in respect of their own motor vehicles, which are used by its management personnel. Thus, credit on the same cannot be denied as they are totally involved in the activities relating to the business. He pointed out that the entire period is prior to 2011. 2.2 In so far as the Cenvat Credit on the taxi hire charges is concerned, he argued that these invoices are in the name of joint venture."Zaidun Leeng Sdn Bhd - Artefact Projects (JV)" has been formed for the purpose of undertaking consultancy assignments ofconstruction of roads for NHAI. He argued that the bills issued by the input service providers are both, in the name of joint venture or in the name of any of the JV partners,since there is no difference between them as far as the provision of service is concerned. He argued that these bills are accounted for and paid for by the appellants. 2.3 He further argued that Cenvat Credit has been denied on service tax paid over the telephone bills used for activities in relation to business on the ground t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting entry is made in the accounts of the appellant in respect of transaction with the associate enterprises. He argued that said explanation is added with a limited purpose of treating any payment received by or made to the associated enterprise and accounted for in the suspense account or by any other name with a view to treat it as payment received or made towards value of taxable service. He further argued that the language employed in both the provisions is very much identical and makes it evident that both these provisions have been incorporated for determining the value of taxable service rather than the time of taxable service. Hence, the explanation to Rule 6 of the Service Tax Rules, 1994 merely relates to the value of taxable service in relation to associated enterprise and not the time or point of taxation of that taxable service. He argued that these provisions have been inserted to take care of situation like following: "Say the service provider and service receiver, both Indian companies, are part of the same group. Company A renders taxable service to company B. Company B will give loans to Company A instead of making payment towards value of taxable service, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be applied to the instant case as those cases related to the Cenvat Credit on inputs and not to input service. On these grounds he argued that decision of the Tribunal in the case of Navaratna S.G. Highway Prop. Pvt. Ltd. - 2012 (28) STR 166 (Tri-Ahmd) which has relied on the decision of the Tribunal in the case of Sai Sahmita Storages (supra) is not correct interpretation of law. 3.2 Ld. AR further also relied on the decision of the Larger Bench on the Tribunal in the case of Tower Vision India Pvt. Ltd. - 2016 (42) STR 249 (Tri-LB) wherein the Tribunal has denied Cenvat Credit of pre-fabricated shelter parts and doors as capital goods. 4. We have gone through the rival submissions. 4.1 We find that Cenvat Credit in respect of insurance and vehicle repairs and maintenance service has been denied. All these Cenvat Credit relates to period prior to 2011. The definition of input service at the material time read as under: "Input service" means any service, - (i) Used by a provider of taxable service for providing an output service; or (ii) Used by the manufacturer whether directly or indirectly, in or in relation to the manufacture of final products and clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained in the services were availed in personal capacity of the employee or for the business. One of the ground of denial of credit is lack of evidence regarding the ownership of the vehicles and use of same for business purpose. No evidence to counter the same has been produced except a bald claim. The matter is therefore remanded to Commissioner for fresh adjudication. The appellants are free to produce evidence to substantiate their claim in terms of rule 9 of the CCR. 4.2 It has also been argued that the credit in respect of policies relating to workmen compensation, etc. has been denied on the ground that the same are in the name of individuals or the joint venture with Zaidun Leeng and hence the credit is inadmissible. It has been argued that the joint venture was formed for the purpose of bidding of certain tenders and therefore, the credit for the same is admissible. Similarly, in respect of invoice of insurance which are in the name of individuals or in the name of joint venture cannot be allowed as they are separate entities different from the appellants. Moreover, in respect of individuals, no evidence of payment of said insurance by the appellants have been produced. Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave not provided any evidence of the said use in terms of Rule 9 of the Cenvat Credit Rules. In these circumstances credit of the same cannot be allowed. 4.5 In so far as the Cenvat Credit in respect of construction service and works contract is concerned, the same have been claimed to have been used for the purpose of construction of office. The ground of denial is essentially that in terms of decision of the Tribunal in the case of Manikgarh Cement Works - 2010 (18) STR 275, the inclusive part of the definition of input service needs to be qualified by main part of the definition. The para 5 of the said decision reads as under: 5. I am not impressed with the way the ld. counsel has sought to distinguish Maruti Suzuki case from Coca Cola case. He argued that the apex Court's decision relating to "input" could not be applied to "input service". This argument is not acceptable, given the definitions of "input" and "input service". Whether it be input or input service, the main part of the definition contains the quintessential ingredients and the inclusive part provides a non-exhaustive list of items each of which should satisfy the requirements of the main part. Ld. counsel has p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint of time when the liability to pay tax arises in respect of transaction with the associate enterprises. The appellants have argued that Rule 6 (1) of the Service Tax Rules has merely clarified the scope of the said rules. The appellants have sought to explain the explanation by giving following examples: "Say the service provider and service receiver, both Indian companies, are part of the same group. Company A renders taxable service to company B. Company B will give loans to Company A instead of making payment towards value of taxable service, with an intention that Company A will not be liable to pay service tax to the Government. To deal with such a situation, the explanation is added". We find that the argument of the appellants are misplaced. The scope of provision is very clear and unambiguous. The liability to pay tax arises in respect of the gross amount charged, in terms of Section 67 of the Finance Act, 1994. The time at which the payment is to be made is decided in terms of Rule 6 (1) of Service Tax Rules. In both, the section as well as rules, it has been clarified that any amount credited or debited, as the case may be, to any account, whether called susp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants were paying the tax and not evading. The dispute only relates to the time of payment of tax. Thus it would not be correct to say that they had an intention to evade the tax. The appellants have paid the interest as well. In these circumstances imposition of penalty under section 78 cannot be sustained. It is seen that the appellants have sought waiver of penalty under Section 76 relying on the decision of Tribunal in the case of Pendharkar Constrictions - 2011 (23) STR 75. It is seen that penalty under Section 76 has been imposed for the period upto 10/05/2008. Relying on the decision in case of Pendharkar Constrictions, the penalty under Section 76 is waived. 4.9 In so far as invocation of limitation in the case of availment of Cenvat Credit is concerned, we find that the denial of Cenvat Credit is mostly on the ground of failure to produce evidence in terms of Rule 9 of Cenvat Credit Rules. It is seen that the impugned order seeks evidence in terms of Rule 9 and the same has not been provided leading to confirmation of demand of reversal of credit. It is seen that even in their appeal memorandum they have not given any evidence to support their claim to Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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