2011 (7) TMI 456 - AT - Service Tax

Tribunal upholds input services eligibility for CENVAT Credit

CCE Vadodara-II Versus M/s Plastichemix Industries

The Revenue's appeal challenging the eligibility of various input services for CENVAT Credit was dismissed. The Tribunal upheld the Commissioner ... CENVAT Credit - Input services - Input services like Courier services, Clearing & Forwarding services, C.A. services, Maintenance and Repair services - The Tribunal in the case of Cadila Healthcare Ltd. Vs. CCE Ahmedabad (2009 -TMI - 75189 - CESTAT, AHMEDABAD), has held that clearing and forwarding service as also courier service are eligible input services for the purpose of availing credit. As such, no merits are found in the above plea of the Revenue.Limitation - Since, the fact of taking credit was reflected by the assessee in their periodical returns - This fact is sufficient to reflect assessee bonafide - Fact of taking credit was reflected by the assessee in their periodical returns - This fact is sufficient to reflect upon their bonafide - As such, no infirmity can be found in the view of Commissioner(Appeals) holding the demand to be barred by limitation. Issues:1. Eligibility of CENVAT Credit for various input services availed by the respondent.2. Registration requirement for the head office as Input Service Distributor.3. Dispute over the eligibility of courier services and clearing & forwarding services for availing credit.4. Bar on demand by limitation and the requirement for filing supporting documents for CENVAT Credit.Issue 1: Eligibility of CENVAT Credit for various input services:The appeal was filed by the Revenue against the Commissioner (Appeals)'s order allowing CENVAT Credit for input services like Courier services, Clearing & Forwarding services, C.A. services, Maintenance and Repair services availed by the respondent. The respondent had obtained the credit based on invoices issued by their head office acting as an Input Service Distributor for services availed in January 2005.Issue 2: Registration requirement for head office as Input Service Distributor:The Revenue contended that the appellant's head office was not registered as an Input Service Distributor as required by the Service Tax (Registration of Special Category of Persons) Rules, 2005. However, it was noted that the legal requirement for such registration came into force in June 2005, while the credit was availed by the respondent in March 2005. Therefore, the Revenue's grievance on this issue was deemed unsustainable.Issue 3: Dispute over eligibility of courier services and clearing & forwarding services:The Tribunal referenced a previous case to establish that clearing and forwarding services, along with courier services, are eligible input services for availing credit. As the Revenue did not dispute the availability of credit for these services, the plea against their eligibility was found to be without merit.Issue 4: Bar on demand by limitation and requirement for filing supporting documents:The Commissioner (Appeals) had held that the demand was barred by limitation, stating that the assessee's submission of periodical returns to the Revenue was sufficient. The Revenue argued that filing returns alone was not enough and that supporting documents should be provided for taking CENVAT Credit. The judgment emphasized that the mere reflection of credit in the returns indicated the assessee's good faith, and the extended period for limitation could only apply in cases of intentional evasion. Since no evidence of malafide intent was presented, the demand was rightfully held to be barred by limitation.In conclusion, the Revenue's appeal was rejected both on merit and limitation grounds, affirming the eligibility of the input services for CENVAT Credit and the sufficiency of the assessee's compliance with the filing requirements.