2012 (6) TMI 664 - AT - Service Tax

Appellants penalized for improper cenvat credit on service tax, Tribunal stresses compliance with invoice rules

The Tribunal found that the appellants availed cenvat credit on service tax without providing all necessary details as per the prescribed rules. The ... Waiver of pre-deposit – CENVAT Credit – Denial of credit on invoices issued by five star hotels for renting out conference rooms on the ground that invoices did not contain details as per Rule 4A of Service Tax Rules, 1994 read with Rule 9 of CENVAT Credit Rules, 2004 – Held that:- Service of providing conference rooms comes within the purview of Mandap Keeper service and aggregate value of such services is the amount received by the Mandap keeper for such service – If the amount indicates the value of food separately, the service provider is eligible for claiming rebate and if they have not claimed such rebate, Revenue cannot force such a service provider to claim abatement – Invoice for an amount of Rs. 8722 issued in the name of director doubtful, pre-deposit ordered Denial of credit on invoices issued by telecom service providers – missing details furnished subsequently - no sufficient reason to call for pre-deposit – Pre-deposit waived Issues:- Availing cenvat credit on service tax without necessary details as prescribed under Rule 9 of Cenvat Credit Rules read with Rule 4A of Service Tax Rules, 1944.- Disputed amount related to invoices from hotels described as 'Banquets' and other services like advertisement in newspapers and telephone services.- Argument on whether organizing conference is an input service for commercial coaching or training.- Discrepancies in invoices for courier and telephone services not containing required details specified in Rule 4A of the Service Tax Rules.- Requirement of pre-deposit for hearing the appeal and waiver of balance dues.Analysis:1. The appellants availed cenvat credit on service tax without providing all necessary details as per the prescribed rules. The Revenue initiated proceedings for recovery of the cenvat credit availed during a specific period. A show cause notice was issued, leading to a demand confirmation and imposition of penalty. The appellants appealed to the Commissioner (Appeals) and subsequently to the Tribunal, seeking waiver of pre-deposit for hearing the appeal.2. The disputed amount included invoices from hotels labeled as 'Banquets,' advertisement costs, and telephone services. The Revenue contested the eligibility of cenvat credit based on these invoices, citing lack of essential details. The appellants presented evidence to support the services received, including letters from service providers and invoices. The issue of personal use by the Director for certain invoices was also acknowledged.3. The argument revolved around whether organizing conferences constituted an input service for commercial coaching or training. The Revenue raised objections regarding invoices for courier and telephone services, highlighting discrepancies in the details provided. The adjudicating authority confirmed the duty demand based on these discrepancies.4. After considering both sides' arguments, the Tribunal found that the appellants had indeed utilized services from five-star hotels for conducting training sessions. The primary service provided, such as providing conference halls, fell under the Mandap Keeper Service category. The Tribunal noted that the appellants had not claimed any rebate on the value of food separately, which was permissible. The Tribunal also addressed the issue of missing details in telephone service invoices, stating that pre-deposit was required for certain invoices while waiving the balance dues for the appeal's admission.5. In conclusion, the Tribunal directed the appellants to make a specific deposit within a specified timeframe and granted a stay on the collection of the remaining amount during the appeal's pendency. The judgment emphasized the need for compliance with rules and the importance of providing necessary details in invoices to support the availed credits.