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2024 (5) TMI 130 - CESTAT NEW DELHICENVAT Credit - Availment of CENVAT credit on input services - availment of CENVAT credit on inadmissible documents - non-payment of amount under rule 6(3)(i) of CENVAT credit rules - non-payment of service tax on manpower recruitment or supply agency services. Availment of credit on certain input services - HELD THAT:- The term input services is very wide and cannot be restricted to any specific type and nature of input services. However, with the introduction of exclusion clauses A to C, it is clear in no uncertain terms that CENVAT credit can be availed on all the input services which are used by the service provider for providing output services as well as services that are covered and defined in the inclusive part of the definition with the specific exclusions - the meal vouchers being provided to the employees, prior to 1.4. 2011, the same is a welfare activity - Tribunal in the case of ANDRITZ TECHNOLOGIES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BANGALORE [2019 (12) TMI 122 - CESTAT BANGALORE] has held that 'As far as Food coupons/sodexo coupons are concerned, I find that these services are in the nature of welfare service and purely for personal consumption of employees as these are perquisites allowed to the employees. Further, I find that Commissioner (Appeals) has given reasons for denying the Cenvat credit on sodexo coupon and I do not find any fault in that and uphold the same.' For the period post 1.4.2011, there is a specific exclusion provided under clause C to Rule 2(I) that outdoor catering service, if used for personal use or consumption of any employee is not considered to be input service. Therefore, there are no infirmity in the impugned order in this regard. Credit availed on the accommodation provided to staff - HELD THAT:- The service of accommodation was necessary for the purposes of providing the service of consulting engineering services and is integrally connected with the same. Perquisites are generally meant for the comfort, convenience and welfare of the employees. Even though it has been argued that perquisites do fall within the scope of input service, the benefit of Cenvat credit still cannot be allowed, as any activity for the comfort, convenience and welfare of its employees cannot be treated as having been done in course of furtherance of business - Bombay High Court in the case of CCE VERSUS MANIKGARH CEMENT [2010 (10) TMI 10 - BOMBAY HIGH COURT] held that 'in the present case, in our opinion, rendering taxable services at the residential colony established by the assessee for the benefit of the employees, is not an activity integrally connected with the business of the assessee and therefore, the tribunal was not justified in holding that the services such as repairs, maintenance and civil construction rendered at the residential colony constitutes 'input service' so as to claim credit of service tax paid on such services under Rule 2(1 ) of the CENVAT Credit Rules, 2004.' - there is no infirmity the findings of the adjudicating authority in the impugned order in this regard. Availment of credit on inadmissible documents - HELD THAT:- All the services for which input credit was taken had actually been received by the appellant and the incidence of Service Tax had been borne by the appellant. Not mentioning certain particulars in the invoice is only a procedural error, and the availment of CENVAT credit is a substantive benefit which cannot be denied on procedural grounds - as per the proviso to Rule 9(2) of the Credit Rules, as long as all the critical details mentioned therein are available on the invoice, the same would be a valid document for taking credit. No evidence has been brought forward by the Department to state that the inputs were not duty paid. Merely for the said discrepancies, Cenvat credit cannot be denied as held in catena of judgments, some of which have been cited by the Learned Counsel, so long as it is not in dispute that the service tax was paid by the service provider. In fact the appellant has produced an affidavit from the seller of the goods that the duty tax had been paid. Accordingly, the Commissioner had erred in disallowing the credit on such invoices. Non-payment of an amount under Rule 6(3)(i) of the credit rules for providing consulting engineer service in Jammu and Kashmir for the period 2009–10 to 2012–13 - HELD THAT:- The impugned order has held that the credit reversed by the appellant for the period October 2013 to March 2014 does not pertain to the period in dispute. It has been argued that the detailed calculation was for the Cenvat credit reversal for the period 2008-09 to 2012-13. It is noted that in several decisions, it has been consistently held that when proportionate credit has been reversed the department cannot fasten liability under Rule 6(3)(i) of the Credit rules - The Tribunal in the case of RESPONSIVE INDUSTRIES LTD. AND AXIOM CORDAGES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE-II [2022 (8) TMI 639 - CESTAT MUMBAI] had examined the above issue in respect of the appellant who had reversed the Cenvat credit in respect of exempt services, by holding that inasmuch as the quantum or method adopted by the appellant was not questioned by the department, the demand of Cenvat credit cannot be sustained - the appellants have reversed the credit attributable to the inputs/inputs services alleged to have been used in the provision of exempted service - the demand on account of the said issue is liable to be set aside. Taxability of services under “manpower recruitment of supply agency services” - HELD THAT:- In view of the decision of the Supreme Court in C.C.,C.E. & S.T. – BANGALORE (ADJUDICATION) ETC. VERSUS M/S NORTHERN OPERATING SYSTEMS PVT LTD. [2022 (5) TMI 967 - SUPREME COURT], it has to be held that the demand can be confirmed for the normal period only and the demand for the extended period cannot be sustained. Interest and penalty - HELD THAT:- The demand for interest upheld by relying on Supreme Court judgment, in the case of PRATIBHA PROCESSORS VERSUS UNION OF INDIA [1996 (10) TMI 88 - SUPREME COURT], wherein the Hon’ble Supreme Court held that the levy of interest is compensatory and automatic. Penalties imposed under Sections 76, 77, & 78 - HELD THAT:- The department has not been able to establish the ingredients of malafide intention of the appellant to evade payment of service tax. Hence, the penalties imposed on the appellant is set aside. Appeal allowed in part.
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