Tribunal Overturns Ruling, Grants Input Services Credit for 2010-2014, Citing Similar Past Decisions.

The Tribunal allowed the Appeals, setting aside the Impugned Orders that disallowed input services credit under Rule 14 of CCR for the period April 2010 to March 2014. The Tribunal found merit in the Appellant's argument that the procedures under Rule 14 and Rule 5 of CCR were similar, referencing a previous Order by the Commissioner (Appeals) which had permitted credit on similar services. Consequently, the Appellant was granted entitlement to the input services credit and consequential benefits as per law.

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Issues: Disallowance of input services credit u/s Rule 14 of CCR for the period April 2010 to March 2014.

Issue 1: Disallowance of input services credit under Rule 14 of CCR

The main issue in these Appeals was whether certain input services credit had been rightly disallowed by the Commissioner of Central Excise & Service Tax. The Appellant, a provider of output services under the head 'Information Technology services' & 'Information Technology Enables services' (IT & ITES), had availed input services which were disallowed under Rule 14 of CCR. The input services disallowed included Advertising Agency's service, Air Travel Agent's service, Authorized Service station service, Cable service, Courier service, Erection, Commissioning or installation service, Event management service, Insurance/Insurance Auxiliary service, and Storage & Warehousing service for the period April 2010 to March 2014.

Issue 2: Comparison with refund proceedings under Rule 5 of CCR

The Appellant's Counsel argued that a similar issue was involved in the refund proceedings under Rule 5 of CCR. Referring to a previous Order by the Commissioner (Appeals) in a batch of Appeals of the same Appellant, it was highlighted that the disallowances of Cenvat credit on certain input services were considered in detail. The Commissioner (Appeals) had allowed the benefit of credit on services like Advertising Agency service, Air Travel Agent service, Architect service, etc., stating that the disallowances were made arbitrarily without adequate effort to determine the eligibility of the credit. The Counsel contended that the procedure for refund under Rule 5 of CCR and the procedure for disallowance of credit under Rule 14 were similar, and inconsistent views should not be taken with respect to these two rules.

Conclusion

After considering the arguments from both parties, the Tribunal agreed with the Appellant's Counsel that proceedings under Rule 14 and Rule 5 of CCR were similar. The Tribunal also noted a previous Order by the Commissioner (Appeals) which had allowed the benefit of credit on similar input services for the period in question. Therefore, the Appeals were allowed, and the Impugned Orders disallowing the input services credit were set aside. The Appellant was entitled to consequential benefits in accordance with the law.

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