2015 (3) TMI 1126 - AT - Service Tax

Input service credit on freight inward, telecommunication, security services, insurance, consultancy and courier services - whether these are admissible services as per Rule 2(l) of Cenvat Credit Rules, 2004? - Commissioner (Appeals) allowed the claim - Held that - The issue of availment of Cenvat credit on input services under Rule 2(l) of CCR, 2004 came up in Ultratech Cement 2010 (10) TMI 13 - BOMBAY HIGH COURT , wherein held that any services availed by a manufacturer of excisable goods in the course of their business, is entitled to take Cenvat credit. The case law relied upon by the learned AR are prior to the decision of Hon ble High Court of Bombay in the case of Ultratech Cement. Therefore, same are not relevant. Admittedly, in this case also respondent has availed the input service credit on services mentioned being the manufacture of excisable goods in the course of their business. Therefore, they are entitled to take Cenvat credit. Therefore, no infirmity in the impugned order. - Decided against revenue

Summary

Issues involved:
- Appeal against denial of Cenvat credit on various services under Rule 2(l) of Cenvat Credit Rules, 2004.

Analysis:
1. Issue of denial of Cenvat credit: The Revenue appealed against the order allowing import service credit on various services like freight inward, telecommunication, security services, insurance, consultancy, and courier services. The Commissioner (Appeals) had allowed the credit, stating these services are admissible under Rule 2(l) of Cenvat Credit Rules, 2004. The adjudicating authority initially denied the credit, leading to penalties and duty demands. However, the Commissioner (Appeals) overturned this decision based on case laws and allowed the credit, leading to the Revenue's appeal.

2. Argument on freight inward services: The Revenue argued that there was no evidence provided by the respondent regarding the use of freight inward services for initial transportation of inputs, thus claiming the respondent was not entitled to Cenvat credit for this service. The Revenue relied on various case laws to support their argument, but the AR pointed out that these cases were prior to a significant High Court judgment.

3. High Court judgment on Cenvat credit: The issue of Cenvat credit on input services under Rule 2(l) of CCR, 2004 was addressed by the Hon'ble High Court of Bombay in Ultratech Cement case. The High Court held that any services availed by a manufacturer of excisable goods in the course of their business are eligible for Cenvat credit. The AR's reliance on previous case laws was deemed irrelevant in light of the Ultratech Cement judgment, which supported the respondent's entitlement to Cenvat credit for the mentioned services. As the respondent had availed these services for manufacturing excisable goods, the Tribunal found no fault in the Commissioner (Appeals) decision and dismissed the Revenue's appeal.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision to allow Cenvat credit on the disputed services, citing the Ultratech Cement judgment and the respondent's eligibility as a manufacturer of excisable goods. The appeal by the Revenue was consequently dismissed.