Tribunal partially allows appeal on Cenvat Credit for various services, reduces penalty.

The Tribunal partially allowed the appeal, setting aside the demand for Cenvat Credit on outdoor catering and security services but upholding it for repair, reconditioning, motor vehicle, and travel services. The penalty was reduced to 25% of the upheld demand, subject to timely payment.

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Issues:
1. Denial of Cenvat Credit for ineligible import duty, repair of motor vehicle, and insurance of vehicles.
2. Contesting penalty for Cenvat Credit on service tax paid for repair, reconditioning, and outdoor catering services.
3. Dispute over Cenvat Credit on service tax paid for travel services extended to directors, family members, and employees.
4. Denial of Cenvat Credit on security services due to payment method.
5. Appellant's request for waiver of penalty.

Analysis:

1. The appellant availed Cenvat Credit for ineligible import duty, repair of motor vehicles, and insurance of vehicles, which were reversed along with interest. The appellant did not contest the denial of credit for these items, acknowledging the ineligibility. The penalty waiver was sought for the equal amount imposed by the Lower Authority.

2. The contest over penalty for Cenvat Credit on service tax paid for repair, reconditioning, and outdoor catering services was addressed. The appellant argued that the outdoor catering service was for an event organized by the company, not for personal consumption, citing relevant judgments. The Tribunal set aside the demand for Cenvat Credit on outdoor catering but upheld the demand for repair and reconditioning services.

3. Regarding the dispute over Cenvat Credit on service tax paid for travel services, it was noted that the services were for leisure travels by family members of directors and employees, not for official work. The Tribunal upheld the demand for Cenvat Credit on traveling services, emphasizing that credit is admissible only for official purposes, not personal consumption.

4. The denial of Cenvat Credit on security services due to the payment method was discussed. The appellant argued that since the Service Tax was paid by the service provider, the credit should be admissible. The Tribunal agreed, stating that as long as the service is an input service and Service Tax is paid, the credit cannot be denied based on the payment method. The demand for Cenvat Credit on security services was set aside.

5. The appellant's request for waiver of penalty was considered. The Tribunal noted that the adjudicating authority did not provide the option of a 25% penalty as required by law. Following relevant Supreme Court judgments and circulars, the penalty was reduced to 25% of the upheld demand, with a condition for timely payment.

In conclusion, the Tribunal partially allowed the appeal, setting aside the demand for Cenvat Credit on outdoor catering and security services but upholding it for repair, reconditioning, motor vehicle, and travel services. The penalty was reduced to 25% of the upheld demand, subject to timely payment.

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