2015 (9) TMI 1472 - AT - Service Tax

Cenvat credit - renting service - rent paid for separate premises - connection with the manufacturing activity of the respondent - motor vehicles manufactured by the respondent are sold to its buyer through the Depot situated outside the factory premises - Held that - since the duty paid vehicles were removed to the depot, from where the same were sold to the customers, such activity squarely falls under the definition of input service under the category of storage upto the place of removal , itemised therein. In view of the decision of this Tribunal in the case of DSCL Sugar vs. Commissioner of Central Excise, Lucknow 2012 (12) TMI 830 - CESTAT NEW DELHI and Lumax Automotive Systems Ltd. vs. CCE, Delhi-IV 2013 (1) TMI 471 - CESTAT New Delhi where the Tribunal has allowed the services availed for the Go-down / Depot by holding that the services have nexus with the ultimate manufacturer of final product, there is no infirmity in the impugned order passed by the Commissioner (Appeals). - Decided against the Revenue

Summary

Issues:
- Admissibility of cenvat credit on renting services related to separate premises
- Interpretation of input service under Cenvat Credit Rules, 2004

Analysis:
The appeal dealt with the admissibility of cenvat credit on renting services by the Revenue, contending that such services were not directly or indirectly related to the manufacturing activity of the respondent, hence not admissible. The ld. Consultant argued that the service tax paid on rental services was linked to the marketing of vehicles, impacting the manufacturing process, making cenvat credit valid. Reference was made to previous Tribunal decisions supporting the allowance of services related to depots or go-downs as having a nexus with the final product manufacturer.

The Tribunal examined the records and noted that the vehicles manufactured were sold through a depot outside the factory premises, falling under the category of "storage up to the place of removal" as an input service. Citing previous Tribunal rulings, it was established that services utilized for depots or go-downs had a direct connection with the final product manufacturer. Consequently, the Tribunal found no fault in the Commissioner (Appeals) order and dismissed the Revenue's appeal.

In conclusion, the Tribunal upheld the admissibility of cenvat credit on renting services related to separate premises, emphasizing the nexus between such services and the manufacturing process. The decision was supported by the interpretation of input service under the Cenvat Credit Rules, 2004 and previous Tribunal judgments.