Tribunal grants CENVAT credit to storage company, limits on chartered accountant services.

The Tribunal ruled in favor of the appellant, a storage and warehousing company, in a dispute over availing CENVAT credit on security services and lift maintenance. The Tribunal held that the appellant was entitled to the full credit for these services, despite incidental benefits to other companies in the same complex. However, the credit for chartered accountant services under the reverse charge mechanism was disallowed. Penalties under sections 77 & 78 of the Finance Act were reduced proportionately based on the credit allocation decision.

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Issues:
- Dispute over availing CENVAT credit on security services, lift maintenance, and chartered accountant services.
- Applicability of reverse charge mechanism on service tax paid for chartered accountant services.
- Allocation of service tax credit for services enjoyed by multiple companies.
- Imposition of penalties under sections 77 & 78 of Finance Act.

Analysis:
1. CENVAT Credit Dispute:
- The appellant, engaged in storage and warehousing, availed CENVAT credit on security services, lift maintenance, and chartered accountant services.
- The Revenue contended that since other companies in the same complex also benefited from these services, the appellant should only receive a portion of the credit.
- The Tribunal ruled that the appellant hired and paid for these services in full, and incidental benefits to others do not warrant denying them the full credit.
- Consequently, the demand for lift maintenance and security services credit was set aside, while the credit for chartered accountant services under reverse charge mechanism was disallowed.

2. Reverse Charge Mechanism Applicability:
- The appellant admitted that there was no legal provision for paying service tax under reverse charge for chartered accountant services.
- The Tribunal agreed that the appellant wrongly availed credit for these services and upheld the disallowance of such credit.

3. Allocation of Service Tax Credit:
- The Revenue argued that since sister companies in the same complex also benefited, the appellant should not receive full credit.
- The Tribunal emphasized that the appellant exclusively hired and paid for these services, and incidental benefits to others do not diminish their entitlement to full credit.
- Therefore, the demand for recovery of CENVAT credit on lift maintenance and security services was set aside.

4. Penalties Imposition:
- The Tribunal reduced the penalties proportionately based on the outcome of the credit allocation decision.
- Interest and penalties were not sustained for lift maintenance and security services, while penalties were upheld for irregularly availed chartered accountant services credit.

In conclusion, the Tribunal disposed of the appeal by setting aside the demand for lift maintenance and security services credit, upholding the disallowance of chartered accountant services credit under reverse charge mechanism, and reducing penalties accordingly.

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