2025-VIL-2158-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax – Rules 2(l) and 5 of Cenvat Credit Rules, 2004 – Invoking of extended period of limitation – Demand of credit – Appellant is a global IT services company engaged in development of software & exporting thereof through internet to various customers situated outside India – On scrutiny of documents submitted by Appellant, department observed that Appellant had irregularly availed Cenvat credit of service tax paid on inadmissible services – Department issued show cause notice proposing demand of inadmissible credit by invoking extended period of limitation – Commissioner confirmed demand of inadmissible credit – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – Appellant was taking credit of various input services received by them and they were also filing ST-3 returns for claiming credit. Proceedings were initiated on basis of refund claims filed by Appellant under Rule 5 of the Rules. When all facts were being made known to department in form of credit declared in ST-3 return and also in form of refund claims filed, there cannot be a valid ground for invocation of extended period of limitation. Demand beyond normal period of limitation cannot be upheld – Appeal partly allowed - Disallowance of credit – Whether demand raised within normal period of limitation is sustainable – HELD – As outdoor catering service have been put in specific exclusion in Rule 2(l) of the Rules defining input services. CENVAT Credit availed by Appellant on outdoor catering services is disallowed. Credit taken against invoices on which no proper description of service is mentioned on invoice is also disallowed. In respect of CENVAT Credit availed by Appellant against Gym Equipment Services, there is no merit in submissions made by Appellant for reason that these services are meant for person use of employees and hence fall under excluded category. Impugned order rejected submission made by Appellant with regard to demand being made twice in respect of same credit in a very simple manner without going into the details. Question of fact as to either demand had been made twice in respect of same credit, needs to be verified before Original Authority. For this very limited purpose of verification, matter is remanded back to Original Authority
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