The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), remanded matter to calculate admissible credit in the matter regarding the confirmation of cenvat credit on Customs Clearance Services and Tour & Travels Services.
The appellants, M/s Sarita Handa Exports Private Limited, are engaged in the manufacture and export of Quilted Bed Spread, Pillow Sham, Duvet Cover etc. They have availed credit of various input services like Customs House Agent Service, Goods Transport Agency Services, Banking Services, Commercial & Industrial Construction Services etc. It was felt by the Department that these services have no nexus with the manufacturing activity and therefore, credit of the same is not admissible.
Show-cause notices, denying the credit along with interest and imposition of penalty, were issued and the same were adjudicated vide Order dated 24.08.2022 wherein the Commissioner dropped the demand amounting to Rs.1,32,29,442/- and confirmed demand Cenvat credit of Rs.65,48,343/- Hence, the present appeal has been filed before the Tribunal.
R.C. Choudhary, Counsel for the appellant, submitted that the Commissioner has denied the credit on Construction Services, Customs Clearance Services, Renting of Property Services, Installation Services out of which the appellants do not dispute the inadmissibility of the credit availed on renting of property and they have, accordingly, reversed the credit of Rs.3,70,800/-.
It was further submitted that regarding Construction Service, the issue since stands settled in their favour by various judgments of the Tribunal and it was held by this Bench that Customs Clearance Service, Construction Service, Photocopy Service are admissible.
Aneesh Dewan, Authorized Representative for the Department submitted that for the services under Customs Clearance Services and Tour & Travels Service, the appellants could not produce any documentary evidence to show that the services were availed in the course of manufacture of final products or in pursuit of their business.
It was submitted that sample invoices produced by the appellants to the Commissioner did not indicate the services availed and in some cases, the indication was vague and therefore, nexus between the input service and the products manufactured and exported was not clearly established.
A Two-Member comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “Regarding Customs Clearance Services and Tour & Travels Services, we find that the impugned order records that the appellants have not produced invoices etc. to prove that the credit is correctly availed by them. While holding in principle that credit on these two services is admissible to the appellants, we are of the considered opinion that the issue requires to go back to the Adjudicating Authority to calculate the admissible credit on the basis of the evidence that may be produced by the appellants.”
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