2014 (3) TMI 437 - AT - Service Tax

Tribunal rules on CISF's tax liability adjustment, clarifies Cenvat Credit claims

M/s CENTRAL INDUSTRIAL SECURITY FORCE Versus COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX

M/s CENTRAL INDUSTRIAL SECURITY FORCE Versus COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX - TMI Issues:- Stay application and appeal filed by Central Industrial Security Force (CISF) against the order confirming demand, interest, and penalties.- Interpretation of Ad-hoc Order exempting Service Tax for CISF from 16.10.1998 to 31.03.2009.- Validity of adjusting Service Tax paid before 01.04.2009 towards liabilities after 01.04.2009.- Applicability of Cenvat Credit rules for Service Tax paid by CISF.Analysis:1. The appeal was filed by CISF against the order confirming demand, interest, and penalties. The Appellant argued that as per the Ad-hoc Order, CISF was required to pay Service Tax only from 01.04.2009 onwards and any amount paid before that should be considered a deposit. The Appellant sought to adjust the pre-01.04.2009 payments towards liabilities after 01.04.2009. The Revenue contended that the adjustment was not permissible under the existing Service Tax Law and suggested seeking a refund instead.2. The Tribunal observed that the Ad-hoc exemption Order exempted Service Tax for CISF from 16.10.1998 to 31.03.2009. Despite this exemption, CISF had paid certain amounts before 01.04.2009 towards Service Tax. The Tribunal noted that instead of seeking a refund for the pre-01.04.2009 payments, CISF adjusted them towards post-01.04.2009 liabilities, which was objected to by the Revenue. The Tribunal agreed with the First Appellate Authority that CISF should have sought a refund for the excess Service Tax paid before 01.04.2009 as per the existing Service Tax Law.3. The Appellant's Advocate argued that any Service Tax paid by CISF would be admissible as Cenvat Credit to M/s IOC for the Security Services availed. The Tribunal acknowledged this argument as separate from the grounds of appeal and noted that Cenvat Credit could be claimed by the concerned assessee as per the Cenvat Credit Rules after the Service Tax is paid along with interest. Ultimately, the Tribunal upheld the order passed by the first appellate authority, disposing of the appeal based on the observations made.This detailed analysis highlights the key arguments presented by both parties, the Tribunal's interpretation of the Ad-hoc Order, the validity of the adjustment of Service Tax payments, and the applicability of Cenvat Credit rules in the context of the legal judgment delivered by the Appellate Tribunal CESTAT AHMEDABAD.