2011 (1) TMI 25 - AT - Service Tax

Appellate Tribunal CESTAT Chennai: Credit denial for imported methanol, but allowed for trading fee, vehicle service, consultation.

The Appellate Tribunal CESTAT, CHENNAI denied credit for imported methanol due to lack of evidence, but allowed credit for trading fee for scrap disposal, ... Cenvat Credit - service tax was paid on account of booking of the offence - department denied the claim of credit - Held that: - redit should not have been denied on the ground as held by the lower appellate authority. Since the assessees are in a position to provide all the details regarding the nature of service and the place of usage of the service credit to be allowed - matter remanded for verification. Issues: Denial of credit for various items - Imported methanol, trading fee for scrap disposal, service of vehicles, consultation for water drawal systemIn the judgment by the Appellate Tribunal CESTAT, CHENNAI, credit was denied for multiple items. Firstly, credit for imported methanol was disallowed due to the lack of evidence establishing that the methanol was intended for the assessees. The tribunal upheld this denial as the assessees failed to substantiate their claim. However, for the trading fee for scrap disposal and service of vehicles, the assessees were able to provide evidence that the scrap material originated from their factory and furnish details of the vehicles, leading to a reconsideration of the denial of credit for these items.Regarding the consultation for water drawal system, the tribunal found that the offence case was not related to this consultation but to the shifting of graphite equipment. As the assessees could provide detailed information about the nature of service and its usage, the denial of credit for the consultation service was deemed unjustified. Therefore, the tribunal set aside the denial of credit for the second, third, and fourth items and remitted these claims for a fresh decision to the adjudicating authority, with instructions to provide the assessees with a reasonable opportunity to present their defense.In conclusion, credit for the imported methanol remained disallowed, while the claims for credit on the trading fee for scrap disposal, service of vehicles, and consultation for water drawal system were remitted for a fresh decision. The judgment disposed of the appeals accordingly, emphasizing the need for a thorough reevaluation based on the particulars to be provided by the assessees.