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TMI Blog2024 (6) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... t service - prima facie, when the service tax has been duly paid on the input services and the when such services were utilised in provision of output service, then taking of CENVAT Credit cannot be objected to inasmuch as Rule 3 of CENVAT Credit Rules, 2004 specifically state that a provider of output service to avail such credit of tax paid on input service. The grounds for rejection of CENVAT Credit on input services in the order of the adjudicating authority which was upheld by the learned Commissioner (Appeals) is that the input services have not been specifically used in the premises which have not been registered with local authorities. From the facts of the present case, it clearly transpires that all output services have been provided by the appellant by duly discharging the service tax applicable thereon. Wherever separate service tax registration having been for provision of service from a particular facility or premises, the output service tax in respect of such facility or premises is duly discharged, and the input services with specific reference to such facility have been availed by the appellants. However, where there is no such separate facility or premises for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts without raising any objection, then excess CENVAT Credit cannot be calculated on account of periodical ST-3 returns, as these are only declarations in the prescribed format filed by the appellants. The mistakes or errors, if any, in such incorrect declaration of ST-3 returns have to be identified and the excess credit taken, arising on account of ineligible or incorrect credit amount having been taken has to be worked out. Obviously in the present case, neither there is any such explanation nor there is any discussion in the original order or impugned order, to justify the case of demand of excess availment of CENVAT Credit - In the absence of any specific grounds and the evidences leading to such CENVAT Credit being ineligible not produced in the adjudication stage, it is not feasible to fasten such liability on the appellants - there is no justification for demand of excess CENVAT Credit taken by the appellants for Rs.26,449/-, and the same is liable to be dismissed as legally not sustainable. Extended period of limitation - penalty - HELD THAT:- As rightly held in a number of decisions by the higher judicial forum, in respect of issues concerning interpretation of law, exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Service Tax Registration Certificate, Commission/service charges paid on sale of land at Coimbatore for total amount of Rs.3,51,394/- covering the period 2012-13 to 2014-15. Further, vehicle hire charges, vehicle expenses, club membership charges on which CENVAT Credit was taken as input services for total amount of Rs.14,231/- was also objected to as services relating to motor vehicles were excluded under Clause (B) (BA) of Rule 2 (l) ibid. The Audit also pointed out that an amount of Rs.26,449/- was an excess credit amount utilised in comparison with both CENVAT Register and ST-3 Returns and the same is liable to be paid by the appellants. The above findings were communicated to the appellants by the Audit through a Letter of Audit findings dated 01.02.2016 and the same was replied by the appellants stating that they are not agreeable to findings of the audit that there was an excess availment of CENVAT Credit during the financial year 2012-13. As regards security services and commission charges are concerned, the appellants claimed that the scope of input service is wide enough to cover security service, commission service and as these services have been utilised for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tel is eligible to take input credit of the tax paid on the services consumed. Accordingly, he claimed that in providing such output service, the appellants had availed CENVAT Credit paid on input services such as services provided to safe guard/protect and secure the land parcels against encroachment, services availed in respect of the brokers or agents through whom sale or purchase of land can be transacted and hence these services are essential input services. He further stated that CENVAT Credit availed in respect of the above services is not excluded under clause B of rule 2(l) of CCR, 2004. Thus, he claimed that the impugned order is not sustainable. 4. Learned Authorised Representative (AR) appearing for the department, on the other hand, submitted that the input credit availed in respect of security charges relating to the Nagpur hotel is not eligible as it is no way related to Mumbai Registration; the appellants are not in the business of construction services and hence brokerage charges in sale of land is no way related to the business of the appellants. Further, learned AR submitted that input services used in relation to manufacturing activity or providing output servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to effectively provide the output service. Further, the appellants had taken professional service in certain business transaction for the proposed land in Coimbatore in provision of output service and the service tax has also been properly paid by such professional, which are being taken as input service credit. Thus, prima facie, when the service tax has been duly paid on the input services and the when such services were utilised in provision of output service, then taking of CENVAT Credit cannot be objected to inasmuch as Rule 3 of CENVAT Credit Rules, 2004 specifically state that a provider of output service to avail such credit of tax paid on input service. 8.1 In order to address the above issue of eligibility to avail the CENVAT Credit on disputed input services, I would like to refer the relevant legal provisions contained in CENVAT Credit Rules, 2004 as it existed during the disputed period in respect of the taxable service under dispute. Definitions. 2. In these rules, unless the context otherwise requires, (l) input service means any service,-- (i) used by a provider of output service for providing an output service; or (ii) used by a manufacturer, whether directly or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of which first category refers to (i) means part of the definition, generally cover services which are used directly or indirectly, in or in relation to manufacture of final goods or for providing of output services; and second category refers to (ii) inclusion part of the definition, specifically state certain services used in relation to various activities, which is used in relation to the manufacture of final products or provision of output services, both of which are covered under the scope of input services . Further, the third category, (iii) exclusion part of the definition provided under Clauses (A), (B), (BA) and (C), specifically provide for certain services or portion of such services, which are not included in the above definition of input service . However, there are certain exceptions to this exclusion which are also given in the form of except for provision of certain services , except when used by certain category of persons , when such services are not primarily used for specified use etc. 8.3 In order to examine whether a particular service is covered as inputs service , either it could be covered under category (i) or (ii) and should not fall under the exclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are covered under the means and inclusion part of the definition of input service under Rule 2(l) ibid and are not covered by exclusion part of the definition, I find that there is no legal basis for denial of CENVAT Credit on these services. 8.5 I find that the grounds for rejection of CENVAT Credit on input services in the order of the adjudicating authority which was upheld by the learned Commissioner (Appeals) is that the input services have not been specifically used in the premises which have not been registered with local authorities. From the facts of the present case, it clearly transpires that all output services have been provided by the appellant by duly discharging the service tax applicable thereon. Wherever separate service tax registration having been for provision of service from a particular facility or premises, the output service tax in respect of such facility or premises is duly discharged, and the input services with specific reference to such facility have been availed by the appellants. However, where there is no such separate facility or premises for which separate registration has been taken, the central registered office providing output service was di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, hence the link is fulfilled. Further, the Rent-a-Cab operator vehicle service is fully covered by the first limb of services provided by way of renting of a motor vehicle . However, when it comes to the second limb, it has to be seen whether the input service qualifies the requirement that, in so far as they relate to a motor vehicle which is not a capital goods . In this regard, I find that the term capital goods has been defined for the purpose of CENVAT Credit Rules, 2004 under Rule 2(a) ibid which is extracted and given below: (a) capital goods means: (A) the following goods, namely: (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804 and wagons of subheading 860692 of the First Schedule to the Excise Tariff Act; (ii) pollution control equipment; (iii) components, spares and accessories of the goods specified at (i) and (ii); (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; (vii) storage tank; and (viii) motor vehicles other than those falling under tariff headings 8702, 8703, 8704, 871 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iginal authority and upheld in the impugned order, I find that such determination of excess availment is with respect to ST-3 returns; whereas in terms of CENVAT Credit taken in the books of account, there is no excess availment. It is not the case of Revenue that the CENVAT Credit taken by the appellants in incorrect or such excess availment has arisen from ineligible CENVAT Credit taken by the appellants. Once, the credit has been allowed to the appellants without raising any objection, then excess CENVAT Credit cannot be calculated on account of periodical ST-3 returns, as these are only declarations in the prescribed format filed by the appellants. The mistakes or errors, if any, in such incorrect declaration of ST-3 returns have to be identified and the excess credit taken, arising on account of ineligible or incorrect credit amount having been taken has to be worked out. Obviously in the present case, neither there is any such explanation nor there is any discussion in the original order or impugned order, to justify the case of demand of excess availment of CENVAT Credit. In the absence of any specific grounds and the evidences leading to such CENVAT Credit being ineligible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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