Tribunal allows appeal, sets aside order, deems denial of Cenvat Credit unsustainable. Show cause notice barred by limitation.

The Tribunal allowed the appeal in favor of the appellant, setting aside the order and deeming the denial of Cenvat Credit unsustainable. The show cause notice was considered barred by limitation for the period beyond one year, as there were no allegations of duty evasion and the Department proceeded on presumptions.

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Issues Involved:
1. Admissibility of Cenvat Credit on various input services.
2. Validity of documents for availing Cenvat Credit.
3. Denial of Cenvat Credit for want of contract/agreement.
4. Denial of Cenvat Credit for lack of Service Tax Registration.
5. Denial of Cenvat Credit on membership charges.
6. Limitation period for issuing the show cause notice.

Detailed Analysis:

1. Admissibility of Cenvat Credit on Various Input Services:
The Department observed that the appellant had availed inadmissible input service credit on services like construction service, civil constructions, banking and financial services, consulting engineering services, maintenance or repair service, contract service, club membership, insurance service, rent-a-cab, travel by air services, etc. These were alleged not to be specified input services as per Rule 2(l) of the Cenvat Credit Rules, 2004, as they were not used for manufacturing the final product.

2. Validity of Documents for Availing Cenvat Credit:
The Department disallowed the Cenvat Credit for want of STTG Certificate as required by the Notification dated 22nd August 2014. The appellant argued that the period in dispute was from August 2011 to March 2012, and the 2014 Notification should not be applied retrospectively. The Tribunal agreed, stating that the Notification could not be applied retrospectively and disallowing the credit for want of a document not statutorily required for the period in question was wrong.

3. Denial of Cenvat Credit for Want of Contract/Agreement:
The credit was denied for services mentioned in Annexure D of the show cause notice due to the absence of contracts or agreements. The appellant argued that invoices were provided, containing all necessary details proving the activities were related to the business. The Tribunal found that the absence of contracts or agreements was insufficient to deny the credit, especially when other documents substantiated the services received.

4. Denial of Cenvat Credit for Lack of Service Tax Registration:
The denial of Cenvat Credit for services like consultancy and general insurance services was based on the lack of Service Tax Registration. The Tribunal relied on precedents where the absence of Service Tax Registration was deemed a procedural lapse, and the credit could not be denied if the transaction was bona fide and all other requisite details were present.

5. Denial of Cenvat Credit on Membership Charges:
The credit for membership charges was denied, assuming it was for personal entertainment. The appellant clarified that the membership was for an industrial association, relevant to the business. The Tribunal agreed, stating that the membership was related to business activities and not for personal use.

6. Limitation Period for Issuing the Show Cause Notice:
The appellant contested the show cause notice dated 18.09.2015, arguing it was barred by limitation since it covered the period from September 2010 to July 2015. The Tribunal noted that there were no allegations of duty evasion, and the Department proceeded on presumptions. Therefore, the extended period of limitation could not be invoked, making the demand beyond the normal period of one year barred by time.

Conclusion:
The Tribunal set aside the order under challenge, allowing the appeal. The denial of Cenvat Credit on the grounds mentioned was found unsustainable, and the show cause notice was deemed barred by limitation for the period beyond one year. The appeal was thus allowed in favor of the appellant.

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