TaxTMI 
TaxTMI 
2023 (5) TMI 805
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....amount of wrongly availed Cenvat Credit under the provisions of Rule 14 of Cenvat Credit Rules 2004 read with the provisions under Section 75 of the Chapter V of the Finance Act 1994, as amended, from M/s. Credit Analysis & Research Ltd. (iii) I also impose a penalty of Rs. 4,02,441/- (Rupees Four Lakhs Two Thousand Four Hundred Forty One Only) under Rule 15(3) of the Cenvat Credit Rules 2004 read with Section 78 of the Finance Act 1994 on M/s. Credit Analysis & Research Ltd." 2.1 Appellant is provider of output services and is availing credit on input services. During the course of audit for the period 2008-09 to 2011-12 it was noticed that the appellant has availed input service credit on the following services - Expenses related to ESOP, Club or Association, Tour Operator & Rail Travel Agency, Outdoor catering, Rent-a-cab, Insurance, Health services, which are inadmissible in terms of Rule 2(l) of Cenvat Credit Rules, since the said expenses were related to staff and had no nexus with the output services provided by the appellant. A show cause notice dated 20.03.2014 was issued to the appellant asking them to show cause as to why:- "a) to deny and recover Cenvat Credit wr....
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....express language used in the statute. The appellant, in appeal memo, have not submitted any evidence that the service received under a particular invoice have been consumed for providing output service exported. Therefore, it is not only necessary to verify that a particular kind of input service is consumed for providing a particular kind of 'output service', used by a provider of output service for providing an output service but also it is necessary to ensure that the eligible service received under various invoices have actually gone into consumption for providing the output service in question and not utilized for 'other purpose. The case laws cited by the appellant in their support are mainly prior to 01.04.2011 which do not encompass the amended provision, as discussed in para 6 above. The definition of input services' cannot be stretched to such an extent that it becomes practically illogical. Further, as discussed supra, all services which constitute activities related to business need not have a nexus with output service provided and would not qualify to become input Service as defined under Rule 2 (1) of the Cenvat Credit Rules, 2004. In view of that the ....
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.... prove that the services received had actually gone into the consumption for providing those output service which are exported, I do not intend to interfere with the findings of the lower authority in respect of these services and accordingly uphold the denial of credit to that extent. Held Accordingly. 8.2 Club Membership Fees: The appellant contended that the club is place where the directors meet with business heads and industry leaders which help in business and procurement of business. I am of the view that the Cenvat credit pertaining to club's membership services is admissible, if proved that the club's membership services are in relation to the output services. However, the appellant failed to prove that the for which club they have taken membership and also failed to produce any tangible documentary evidence to prove that the said services are not used for the personal use of the employees and also failed to prove that in case of absence of such input services, the quality and efficiency of the provisions of service exported is adversely impacted. Since the appellant has failed to established the direct nexus such input services for providing output services, th....
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....y will be affected as they work after office hours also and hence, the services of outdoor caterer is input services. I find that the outdoor catering services has been utilised for the employees only. I am of the view that the input services have been specifically excluded from the purview of the definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004 with effect from 01.04.2011, if used for personal use in the present case, the appellant has failed to produce any tangible documentary evidence to prove that the said services are not used for the personal use of the employees and also failed to prove that in case of absence of such input services, the quality and efficiency of the provisions of service is adversely impacted. Since the appellant has failed to established the direct nexus such input services for providing output services, therefore, their plie this in relation to business and output service cannot be considered and hence are liable to be rejected and since such input services are not analogous to the services falling within the ambit of Rule 2 (1) of the Cenvat Credit Rules, 2004 and the onus is on the appellant to prove that the services receive....
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.... inputs services as inadmissible. Further, I find that the Hon'ble Tribunal in the case of M/s S. K. D. Lakshmanan Fireworks Industries reported in 2016142) STR 359 (Tri- Chennai) held as under: "6. From the above, it appears that in terms of Rule 2(1)(B) of the Casual Credit Rules, 2004, credit of service tax paid on General Insurance Services [Section 65(105)(d)], renting of a cab (Section 65(105)(o), mo vehicle related service (repair, reconditioning or restoration of motor vehicles, in any manner) [Section 65(105)(zo)] and supply of tangible goods [Section 65(105)(zzzzj)), if these services relate to motor vehicles, is not allowed. Further, in terms of Rule 2(1)(B) of Cenvat Credit Rules, 2004, these credits can be taken only if these services are used for providing taxable services for which credit on motor vehicle is available as capital goods. In other words these credits are available to them only if they are a service provider providing services such as courier service, Tour operator service, rent-a-cab operator service, providing Goods Transport Agency service, outdoor caterer service etc. Since, the assessee is not a service provider and is only a manufacturer, th....
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....interest against the appellant. Further, the provision makes it abundantly clear that where the Cenvat credit has been taken or utilized wrongly the same is recoverable along with interest. I find that Rule 14 of Cenvat Credit Rules,2004 read with Section 75 of the Finance Act, 1994 provides for the authority and machinery for recovery of interest in such cases and unlike Section 28 of the Customs Act, 1962, Section 75 of Finance Act, 1994 does not provide for any time limit for recovery of interest, hence question of time barred does arise. I find that as the appellant had suppressed the facts with intention to availed inadmissible Cenvat credit, penalty under Rule 15(3) of Cenvat Credit Rules, 2004 read with Section 78 of the Finance Act, 1994 is mandatorily imposable as has been held by the Apex court in the case of Dharmendra Textile Mills Ltd-2008 (231) ELT 3 (Se) and Rajasthan Spinning & Weaving Mills Ltd-2009 (238) ELT 3 (SC). Therefore, hold that penalty is imposable on the appellant under Rule 15(3) of Cenvat Credit Rules, 2004 read with Section 78 of the Finance Act, 1994. 9.1 Further, the appellant has also contended that the learned Assistant Commissioner has failed ....