2017 (5) TMI 695 - AT - Central Excise

Appeal against dismissal of CENVAT credit upheld, appellant entitled to credit on air ticket amount.

M/s. K.K. Nag Ltd. Versus Commissioner of Central Excise, Bangalore-I Commissionerate

M/s. K.K. Nag Ltd. Versus Commissioner of Central Excise, Bangalore-I Commissionerate - TMI Issues:- Appeal against Order-in-Original upholding dismissal of appellant's appeal regarding irregularly availed Cenvat credit.- Eligibility of CENVAT credit on service tax charged on air ticket.- Availing CENVAT credit based on statement without relevant bills/invoices.- Suppression of facts by the appellant.- Denial of CENVAT credit by Commissioner (A) due to lack of produced documents.- Appellant's possession of documents now and the possibility of producing them before the original authority if remanded back.Analysis:The appeal was directed against the Order-in-Original upholding the dismissal of the appellant's appeal regarding the irregularly availed Cenvat credit. The appellant, engaged in manufacturing polystyrene products, availed CENVAT credit of service tax on an air ticket and based on a statement from their Pune office without relevant bills/invoices. The department discovered this during an audit, leading to a show-cause notice demanding the irregularly availed CENVAT credit along with interest and proposing a penalty. The original authority confirmed the demand and imposed a penalty, which was upheld by the Commissioner (A), prompting the present appeal.During the hearing, the appellant argued that the impugned order did not consider binding judicial precedents or evidence on record. They contended that the denial of CENVAT credit on the service tax charged on the air ticket was incorrect, citing precedents where similar expenses were considered admissible as input services. The appellant also explained the circumstances surrounding the availed credit of &8377; 2,26,729/-, stating that the documents were with the corporate office during an audit due to the ongoing process of shifting their manufacturing facility. The appellant expressed readiness to produce the documents if the matter was remanded back to the original authority.After hearing both parties and examining the material, the Judicial Member found that the appellant was entitled to the CENVAT credit on the air ticket amount. However, regarding the credit of &8377; 2,26,729/-, the matter was deemed to require further review. The case was remanded back to the original authority with directions for the appellant to produce the original documents for consideration. The original authority was instructed to pass a reasoned order within three months from the date of receiving a certified copy of the remand order. The decision was pronounced in open court on 12/05/2017.