Denial of Cenvat Credit on various input services, without considering relevant documents is incorrect, says Customs, Excise and Service Tax Appellate Tribunal.
The dictum was laid by the Ahmadabad West Zonal Bench of CESTAT while allowing an appeal filed by Nayara Energy Ltd. The appeal was preferred against the order of the adjudicating authority, whereby the appellant’s claim for Cenvat credit in respect of various input services like Franchise services, Outdoor catering, Travel Agent services, Event Management, etc. were turned down on the ground that no evidence was produced by the appellant to prove that the services were availed by the appellant and also on the ground that there is no nexus between the services with the manufacture and clearance of the goods or for their business activity.
The Appellate Tribunal observed that though the services in respect of which Cenvat credit was claimed by the Appellate were per se input services, as per various judgments, nevertheless the admissibility of Cenvat credit on these services can be decided only after considering whether these services were used for the purpose specified in the definition of input service. However, CESTAT found that the claim of the appellant was turned down by the adjudicating authority on presumption basis, without duly considering the documents including invoices, CA certificate etc. held by the appellant. The impugned action of the adjudicating authority was hence held to be not correct.
In the light of the above findings, the impugned order was set aside and the appeal was allowed by way of remand to the adjudicating authority to pass a de novo order after considering all the documents to be submitted by the appellant before him and after affording an opportunity of personal hearing.
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