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2018 (4) TMI 618 - AT - Service TaxCENVAT credit - Management Consultancy Service - various input services - Insurance - Vehicle repair & maintenance - Taxi Hire charges - Telephone Charges - Construction Services - Work Contract - extended period of limitation - penalty. Insurance - Vehicle repair & maintenance - credit has been denied as the motor vehicles are capital goods only for providing taxable services - Held that: - there is no evidence to substantiate that the payment for the said policy/repair has been made by the appellant. In absence of the same it cannot be ascertained in the services were availed in personal capacity of the employee or for the business - One of the ground of denial of credit is lack of evidence regarding the ownership of the vehicles and use of same for business purpose. No evidence to counter the same has been produced except a bald claim - matter is remanded for fresh adjudication. Policies relating to workmen compensation, etc - denial on the ground that the same are in the name of individuals or the joint venture with Zaidun Leeng and hence the credit is inadmissible - Held that: - Credit can be allowed only in the circumstances where the cost of the service has been borne by the claimant as only in those circumstances it will form part of the taxable value - In these circumstances credit in respect of insurance expenses cannot be allowed in absence of evidence that the cost of such insurance is borne by the appellant - matter remanded for fresh adjudication. Hire charges - denial on the ground that the invoices were issued in the name of Zaidun Leeng Sdn Bhd and not in the name of the appellant - Held that: - Joint Venture is a separate entity and any service used by such joint venture does not automatically become the service used by the appellants. In such circumstances credit cannot be allowed. However if the cost of such services is borne by the appellants the credit would be admissible - matter remanded for fresh adjudication. Telephone bills, installed in the name of an employee/director - denial on the ground that in terms of Rule 9 of Cenvat Credit Rules, 2004 the Invoice/telephone should be in the name of the appellant to enable them to claim the credit - Held that: - the Commissioner has sought evidence and the appellants have not provided any evidence in terms of Rule 9 of the Cenvat Credit Rules - credit cannot be allowed. Construction service - works contract - input services - Held that: - the appellants have used the services for the purpose of setting up of office for use in respect of their output service. This fact has not been countered by the Revenue. The definition of input service interalia includes services used in relation to setting up of premises of service provider of output service within its fold - the credit of services used for construction of new office cannot be denied - credit allowed. Liability of service tax - Transactions with the associate enterprises - penalty - Held that: - The liability to pay tax arises in respect of the gross amount charged, in terms of Section 67 of the Finance Act, 1994. The time at which the payment is to be made is decided in terms of Rule 6 (1) of Service Tax Rules. In both, the section as well as rules, it has been clarified that any amount credited or debited, as the case may be, to any account, whether called suspense account or by any other name, in the books of accounts shall be liable to tax, where the transaction of taxable service is with any associate enterprises as gross amount charged - the provision of the law are very clear and there is no doubt regarding payment of service tax in respect of transaction with the associate enterprises. Liability of service tax - foreign currency transaction - Held that: - the appellants have admitted in their appeal the said tax liability and paid the same along with interest. Penalty - Held that: - it would not be correct to say that they had an intention to evade the tax. The appellants have paid the interest as well. In these circumstances imposition of penalty under section 78 cannot be sustained - penalty u/s 76 also waived. Extended period of limitation - Held that: - it is apparent that the credit has wrongly been availed and the appellant do not have any evidence of the eligibility in terms of Rule 9 of the Cenvat Credit Rules - This by itself is sufficient to sustain the charge of suppression/misdeclaration - extended period rightly invoked. Appeal allowed in part.
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