AVR Storage Tank Terminals Pvt. Ltd. Versus CCT Visakhapatnam GST
Service Tax
2018 (11) TMI 169 – CESTAT HYDERABAD – TMI
CESTAT HYDERABAD – AT
Dated:- 20-9-2018
Appeal No: ST/30969/2018 – A/31208/2018
Service Tax
Mr. P. Venkata Subba Rao, Member (Technical)
Shri V Ravindranath, Advocate for the Appellant.
Shri A.V.L.N. Chary, Superintendent /AR for the Respondent.
ORDER
Per: Mr. P. Venkata Subba Rao
1. This appeal has been filed against Order-in-Appeal No: VIZ-EXCUS- 001-APP-292-17-18, dated 21.03.2018. The facts of the case in brief are that appellant is engaged in the business of storage and warehousing of bulk liquid cargo and is registered with Service Tax Department. They also availed the benefit of CENVAT credit under CCR 2004. The dispute in question is with reference to three services on which they have availed CENVAT credit between October 2011 and March 2015. These are (1) Service tax paid on security services for the security guards hired by the
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unt of service tax paid on these two services, because of the fact that the other two companies also enjoyed these services although they have not paid for them. As far as the service tax on the basis of challan on which the service tax of under reverse charge on the services rendered by their chartered accountant and utilised by them is concerned, it is the case of the Revenue that the services of chartered accountant are not covered under the relevant provision for payment under reverse charge mechanism. Therefore, they are not entitled to such credit of service tax paid by them. It is the case of the department that these facts have not come to light and were only discovered during the course of audit. Therefore, the extended period of limitation is invokable under the proviso to Section 73(1) of the Finance Act. Interest is also chargeable under section 75 and penalties are imposable under sections 77 & 78 of Finance Act.
2. After following due process, the original authority conf
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vices of lift maintenance as well as security services were hired exclusively by them for the sake of their own company. Incidentally, it so happened that the benefits of these services were also enjoyed by the other two companies in the same complex. Therefore, there is no infirmity in their taking credit of the service tax paid by them on these services. Merely because these services happened to be enjoyed by the other two companies located in the same complex, they cannot be denied the full benefit of service tax paid by them and therefore the demand needs to be dropped on this account. He also argues that no interest or penalty should be imposed upon them.
4. Ld. DR submits that these companies are sister companies which occupied the same complex and have all enjoyed the benefit of these services and therefore the entire amount of service tax paid cannot be attributed to the output services rendered by the appellant. Proportionate credit has been allowed in the Order-in-Original a
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usiness from others the same complex would have also benefited from them. This enjoyment is like the enjoyment of one's porch light by passers by. It does not dilute the utility of these services by the appellant or their nexus with their output services. There is no rule under which the Revenue can vivisect and partly deny the credit on these services simply because somebody else also incidentally benefited from them. The entire service has been hired by the appellant and has been paid for and the entire tax has been borne by the appellant. Therefore, I find no reason to deny them the benefit of CENVAT credit of service tax paid on these services. Therefore, the demand and interest on this count do not sustain. In conclusion, the demand on lift maintenance service and security services is set aside and the demand of recovery of the CENVAT credit availed on the services of chartered accountant paid irregularly under reverse charge mechanism is upheld. The amount of interest and penalty
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