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Tribunal grants credit for input services pre-2011, sets aside penalties The Tribunal allowed the credit amounting to Rs. 1,49,840 for services like Outdoor Catering, Rent for Car Parking, and Subscription for Global Tender ...
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Tribunal grants credit for input services pre-2011, sets aside penalties
The Tribunal allowed the credit amounting to Rs. 1,49,840 for services like Outdoor Catering, Rent for Car Parking, and Subscription for Global Tender Information, finding them eligible as input services pre-01.04.2011. The disallowance of credit for these services was set aside, while the disallowance of Rs. 66,845 was maintained. The penalty for non-production of invoices was also set aside. The appeal was partly allowed, granting credit of Rs. 1,49,840 and setting aside the penalty of Rs. 66,845, with any consequential reliefs in favor of the appellant.
Issues: Disallowance of input services credit for Outdoor Catering Services, Rent for Car Parking, Subscription for Global Tender Information; Contesting disallowance of credit amounting to Rs. 1,49,840; Eligibility of credit for activities related to business pre-01.04.2011; Setting aside of penalty for non-production of invoices.
Analysis: The appellants were engaged in providing various services and were issued a show-cause notice proposing to disallow credit on certain services due to non-production of invoices. The original authority and the Commissioner (Appeals) upheld the disallowance, leading to the appeal. The period involved was pre-01.04.2011.
During the hearing, the appellants withdrew contest for a portion of the demand, explaining the reasons for withdrawal related to traceability of invoices and branch inclusion in registration. They contested the disallowance of credit amounting to Rs. 1,49,840 for services like Outdoor Catering, Rent for Car Parking, and Subscription for Global Tender Information, asserting that all activities related to their business were eligible for credit pre-01.04.2011.
The Tribunal noted that pre-01.04.2011, the definition of "input services" encompassed activities relating to business. It was established through precedents that most activities falling under this category were eligible for credit. Consequently, the Tribunal found the disallowance of credit amounting to Rs. 1,49,840 to be eligible and set aside the demand, while maintaining the disallowance of Rs. 66,845. The penalty imposed for non-production of invoices was also set aside considering the appellant's initial belief in the eligibility of credit.
In conclusion, the Tribunal modified the impugned order to allow credit of Rs. 1,49,840 and set aside the penalty of Rs. 66,854. The appeal was partly allowed with consequential reliefs, if any, in favor of the appellant.
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