2015 (9) TMI 52 - AT - Service Tax

Tribunal grants appeal for input service credit on security guards, telephone, and professional charges.

The Bank of Tokyo-Mitsubishi UFJ Ltd. Versus Commissioner of Central Excise, New Delhi

The Bank of Tokyo-Mitsubishi UFJ Ltd. Versus Commissioner of Central Excise, New Delhi - 2015 (40) S.T.R. 785 (Tri. - Del.) Issues:Denial of input service credit on security guards, telephone connections at bank employees' residences, and professional charges.Analysis:1. Background and Allegations:The appellant, a banking company with an office in Japan and a back-up office in India, was denied input service credit on security guards, telephone connections, and professional charges. The denial was based on the allegation that the appellant wrongly availed cenvat credit on these services, leading to a demand for duty, interest, and penalty under an extended period of limitation.2. Appellant's Arguments:The appellant contended that they provided clarifications during the audit and informed about their intention to avail cenvat credit. They argued that security guards were necessary due to RBI guidelines, and professional fees were paid for various services. The lower authorities did not consider their contentions and denied credit without requesting invoices, which the appellant could have provided.3. Revenue's Position:The Revenue opposed the appellant's claims, stating that the appellant did not produce invoices for professional services, hindering the examination of services utilized. They argued that the appellant failed to follow Cenvat Credit Rules by not entering their back-up office under a registration certificate, thereby not entitled to credit.4. Judgment and Findings:The Tribunal observed that the show cause notice alleged wrongful availing of credit without examining invoices. As the appellant provided invoices during the appeal, they were entitled to credit if compliant with conditions. The security guard and telephone services at the back-up office were integral, making the appellant eligible for credit. Arguments on ISD registration were dismissed as beyond the notice scope, and cited case law was deemed irrelevant.5. Conclusion:The Tribunal found merit in the appellant's appeal, setting aside the impugned order and allowing the appeal with consequential relief. The judgment emphasized that input services were utilized for output services, justifying the appellant's entitlement to cenvat credit.In summary, the judgment addressed the denial of input service credit on security guards, telephone connections, and professional charges, highlighting the importance of examining invoices, compliance with rules, and the nexus between input and output services for cenvat credit eligibility.