2016 (4) TMI 545 - AT - Service Tax

Appeal success: Cenvat credit restored for service tax on pre-2011 services.

M/s Superior Fire & Security Services Ltd. Versus C.C.E. & S.T. Raipur

The appeal was allowed, setting aside the disallowance of cenvat credit for service tax paid on various taxable services before 01.04.2011. The Member ... Entitlement of Cenvat credit - Service tax paid on Group Personal Accident Insurance (GPA) policy, General Insurance, Repair and Maintenance of Vehicles used for providing the taxable service, Vehicle Insurance Charges, Worksmen Compensation Insurance (WC) Policy and Outdoor catering service. - Held that:- since the amount of disputed Cenvat credit of ₹ 6,76,214/- is prior to 01.04.2011, and in view of the fact that the phrase “activity relating to business” was specifically finding a place in the definition clause of “input service”, so, the appellant shall be eligible for Cenvat benefit on the disputed services. Since the appellant is not disputing the Cenvat credit of ₹ 3,14,172/- for the reason that as per the amended definition of input service, the disputed service shall not be eligible for Cenvat credit, no opinion is expressed on entitlement of Cenvat credit on the services covered under the definition after 01.04.2011. Therefore, the appellant is entitled for Cenvat credit of service tax paid on the disputed services prior to 01.04.2011. - Decided in favour of appellant Issues:Disallowance of cenvat credit of service tax paid on various taxable services prior to 01.04.2011.Analysis:The appeal was filed against the order passed by the Commissioner (Appeals) concerning the disallowance of cenvat credit on specific taxable services. The disputed services included Group Personal Accident Insurance (GPA) policy, General Insurance, Repair and Maintenance of Vehicles, Vehicle Insurance Charges, Worksmen Compensation Insurance (WC) Policy, and Outdoor catering service for the period from August 2008 to September 2011. The appellant had voluntarily deposited a portion of the service tax amount while contesting the disallowance of cenvat credit. The appellant argued that the disputed services met the definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004 before the amendment on 01.04.2011. The appellant relied on judgments such as Coca Cola (India) Pvt. Ltd. vs CCE Pune-III [2009 (15) STR 657 (Bom.)] and CCE Nagpur vs Ultratech Cement Ltd. [2010 (20) STR 577] to support their claim.The Revenue, represented by the Ld. DR, upheld the findings of the impugned order disallowing the cenvat credit. After hearing both parties and examining the records, the Member (Judicial) analyzed the definition of 'Input Service' under Rule 2(l) of the Cenvat Credit Rules, 2004. The rule was substituted on 01.04.2011, removing the phrase 'activity relating to business' from the unamended definition. Considering that the disputed cenvat credit amount predated the amendment, and noting that the phrase 'activity relating to business' was crucial in the previous definition, the Member concluded that the appellant was eligible for cenvat benefit on the disputed services. The judgments cited by the appellant further supported their entitlement to cenvat credit. However, a discrepancy was identified in the amount of cenvat credit disallowed by the authorities, leading the Member to remand the matter to the original authority for determining the accurate amount eligible for cenvat credit.In the final decision, the appeal was allowed by setting aside the impugned order. The Member held that the appellant was entitled to cenvat credit for the service tax paid on the disputed services before 01.04.2011. The appeal was disposed of accordingly, emphasizing the eligibility for cenvat credit on the services in question prior to the specified date.