2015 (11) TMI 1568 - AT - Service Tax

Cenvat credit - consultancy service and courier service - nexus between the disputed services and the final product manufactured - courier service are in relation to the logistic support for transportation of goods and dispatch of documents and the consultancy service has been availed by the appellant for verification of credentials of the employees working in the factory - Held that - the disputed services are confirming to input services defined under both the un-amended and amended definition contained in Rule 2(l) of the rules for the purpose of availment of cenvat benefit. Further in view of the fact that the cost of such services have been taken into consideration for determination of the assessable value of the final product cenvat benefit on such services cannot be denied to the appellant in view of the broader definition of input service wherein the phrase activities relating to business is finding place. - Decided in favour of appellant

Summary

Issues: Denial of cenvat benefit on consultancy service and courier service due to lack of nexus with the final product.

Analysis:
- The dispute before the Tribunal revolves around the denial of cenvat benefit on consultancy service and courier service based on the reasoning that there is no connection between these services and the final product manufactured by the appellant.
- The appellant's advocate argues that the courier service is essential for logistic support in transporting goods and dispatching documents, while the consultancy service was used for verifying the credentials of factory employees. The appellant contends that since the services were related to business activities, they should be considered as input services.
- The period of dispute for the courier service is until March 2011, and for the consultancy service, it is until June 2012. The advocate points out that the un-amended definition of input service until March 31, 2011, explicitly mentioned 'activities relating to business,' and the expenses for these services were included in the cost of production for excise duty calculation.
- The advocate further argues that recruitment, which is part of the consultancy service, was included in the amended definition of input service from April 1, 2011. As both services were utilized in employee recruitment, they should qualify as input services.
- On the other hand, the respondent's representative reiterates the findings of the lower order denying the cenvat benefit.
- After hearing both sides, the Tribunal observes that the disputed services are integral to the assessable value of the final product on which excise duty has been paid. The denial of cenvat benefit solely based on the lack of nexus is unfounded.
- The Tribunal notes that the disputed services fall under the definition of 'input services' as per the un-amended and amended rules. Since the cost of these services was factored into the assessable value, the broader definition of 'input service,' including 'activities relating to business,' supports granting cenvat benefit.
- Consequently, the Tribunal finds no merit in the impugned order and sets it aside, allowing the appeal filed by the appellant.