Credit on Telephone service - Meaningless harassment to the assessee
WHILE deciding the eligibility of CENVAT Credit, the favourite line of the department is always "the assessee has not produced any evidence to show that the service was used in the manufacture of final product". They would also press into service the provisions of Rule 9(5) of the CENVAT Credit Rules to hold that the burden on the assessee to prove the admissibility. Recently the CESTAT while deciding the eligibility of CENVAT Credit on telephone service, held:
The Commissioner (Appeal) has recorded that the appellant has not produced evidence to show the nexus between the manufacturing activity and the services in question. It is not understood what sort of nexus is being asked for. Is it necessary to show what was talked in each call through each of the telephone in respect of which Cenvat credit is claimed? Demand for such demonstration can only lead to meaningless harassment to assessees. Where the expenditure is incurred by the company in its books of accounts there is a presumption in favour of the appellant that the service is availed in relation to their business. So long as Revenue has not proved anything to the contrary I do not see any merit in the argument of Revenue.