Areva T & D India Ltd. Vs Customs (Madras High Court)
The appellant, M/s Areva T & D India Limited, manufactured relays, control panels, switches and related parts falling under Chapter 85 of the Central Excise Tariff Act, 1985. It availed CENVAT credit on imported components under the CENVAT Credit Rules, 2004. During verification of its records, the Department found that, for the period 2003-2004 and 2004-2005, the appellant had procured software maintenance services under an annual maintenance contract (AMC) with M/s SAP France SA. Service tax on the AMC services was paid belatedly with interest on 23 January 2006, after which the appellant availed CENVAT credit of the tax paid during February 2006 under the category of input services.
A show cause notice dated 5 February 2008 proposed recovery of ineligible CENVAT credit under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944, levy of penalty under Rule 15(2) read with Section 11AC, and interest under Section 11AB. The appellant replied that maintenance of computer software constituted information technology services, that maintenance of computer software became taxable only from 1 May 2006, and that service tax on services rendered before that date was not payable. According to the appellant, the tax had been paid by mistake and was therefore taken as credit instead of claiming refund.
