2026-VIL-1552-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - CENVAT credit disallowance on services received at unregistered premises and work contract services, Extended period of limitation, Penalty under Section 77 and 78 of Finance Act 1994 - Whether CENVAT credit can be disallowed in respect of services received at unregistered premises whether work contract services used for construction and setting up can be denied CENVAT credit whether extended period of limitation can be invoked and whether interest and penalties are imposable when extended period is not sustainable - HELD - Jurisdictional High Court in Samsung India case has held that refund cannot be denied to assessee merely on basis of non-registration of premises and that under Rules 3 of CENVAT Credit Rules 2004 it is not condition precedent that input services must be received at registered premises only. Demand relating to CENVAT credit on services at unregistered premises is set aside - Regarding work contract services Supreme Court in Larsen and Turbo Ltd has distinguished works contracts as separate species from service contracts. Work contract services exclude services used for construction or execution of works contract of building or civil structure except for specified services. Appellant has not produced evidence showing services were for repair renovation or modernization of existing facilities rather than construction or setting up of new premises - Appellant availed credit on work contract services for construction setting up of BPO branches and determination of proper officer is not shown to be perverse. Demand relating to work contract services is upheld - Demand for CENVAT credit on services at unregistered premises is set aside. Demand for work contract services is upheld for period 2014-15 only. Extended period of limitation is not invoked. Interest is confirmed for demand upheld. Penalties under Section 77 and 78 are set aside – The appeal is partly allowed - Extended period of limitation - Appellant declared CENVAT credit taken in ST-3 returns filed regularly and filed refund claims under Rule 5 of CENVAT Credit Rules 2004 showing all facts were in knowledge of department. Mere non-declaration or delayed knowledge at audit stage is not sufficient to invoke extended period when returns were regularly filed declaring credit taken. Act of commission or omission on part of appellant determines invocation of extended period not manner in which department determined inadmissible credit was taken. Extended period cannot be invoked as no act of omission or commission by appellant has been specified that led to conditions for invocation. Demand is restricted to normal period of limitation for 2014-15 only. Consequential interest is recoverable for period for which demand is upheld. Penalty under Section 78 cannot be sustained when extended period is not invoked as penalty is linked to invocation of extended period.
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