2015 (10) TMI 2284 - AT - Service Tax

Appellate Tribunal upholds demand for ineligible CENVAT Credit on services used in residential colony

M/s Ultra Tech Cement Ltd. Versus Commissioner of Central Excise, Nagpur

The Appellate Tribunal CESTAT MUMBAI upheld the demand for ineligible CENVAT Credit on services used in a residential colony by the appellant, following ... Denial of CENVAT Credit - Various services - Imposition of interest and penalty - Held that:- It is undisputed that the services on which CENVAT Credit were availed are used in the residential colony by the appellant. This issue is no more res integra as the Hon'ble High Court of Bombay in the case of CCE v. Manikgarh Cement - [2010 (10) TMI 10 - BOMBAY HIGH COURT ] has allowed the appeal of the Revenue and held that the services which are rendered at the residential colony for the employees cannot be availed as CENVAT Credit. In view of the law being settled, the demand of CENVAT Credit as ineligible and the interest thereof is correct and needs to be upheld. - Bench on an identical issue, set aside the penalties relying upon the judgements of the Hon'ble High Court of Andhra Pradesh in the case of CCE Hyderabad- III vs. ITC Ltd. reported in [2011 (11) TMI 516 - ANDHRA PRADESH HIGH COURT ]. I do not find any reason to deviate from such a view already taken by the bench in respect of the very same appellant. Accordingly, the penalties imposed on the appellant are set aside. - Decided partly in favour of assessee. Issues:1. Ineligible CENVAT Credit availed by the appellant on services used in a residential colony.Analysis:The judgment by the Appellate Tribunal CESTAT MUMBAI pertains to appeals against Orders-in-Appeal regarding the issue of ineligible CENVAT Credit availed by the appellant on services used in their residential colony. The Tribunal noted that the services for which the CENVAT Credit was claimed were indeed utilized in the residential colony by the appellant. Referring to a precedent set by the Hon'ble High Court of Bombay in a similar case, it was established that services rendered at a residential colony for employees cannot be considered eligible for CENVAT Credit. Therefore, the Tribunal upheld the demand for the ineligible CENVAT Credit and the associated interest, as per the settled law.In a significant point, the Tribunal highlighted a previous decision in the appellant's own case where penalties were set aside based on judgments from the Hon'ble High Court of Andhra Pradesh. Drawing from this precedent, the Tribunal decided to maintain consistency and set aside the penalties imposed on the appellant in the current case as well. This decision was based on the established legal principles and the specific circumstances of the case, ensuring fairness and adherence to legal standards.Ultimately, after considering the arguments from both sides and reviewing the records, the Tribunal concluded that the appeals raised the same question of facts and law, leading to a common order for disposal. The judgment clarified the position on the eligibility of CENVAT Credit for services used in a residential colony, aligning with existing legal interpretations and precedents. By providing a detailed analysis and referencing relevant case law, the Tribunal ensured a thorough and legally sound resolution to the issues raised in the appeals.The judgment, delivered by Hon'ble Mr. M.V. Ravindran, Member (Judicial), emphasized the importance of consistency in applying legal principles and highlighted the significance of established precedents in determining the eligibility of CENVAT Credit. The detailed analysis and reference to relevant case law underscored the Tribunal's commitment to upholding legal standards and ensuring fair and reasoned decisions in matters concerning indirect taxation and credit availment.