2011 (2) TMI 1276 - AT - Service Tax

Cenvat Credit - architect services, authorized service station, interior decoration services, real estate agents services and stock broker services - Rule 2(1)(ii) of the Cenvat Credit Rules, 2004 - It can be seen that the services were utilized by the appellant for the purpose of enhancement of his business - in the case of Coca Cola India Pvt. Ltd. v. CCE 2009 -TMI - 34433 - BOMBAY HIGH COURT - Held that each limb of the definition can be considered as independent eligible for exemption. If that be so, in the factual matrix of this case, as narrated hereinabove, as the said services were, directly or indirectly, used for the purpose of their business, credit cannot be denied - Appeal is allowed

Summary

Issues:
Whether the appellant is eligible for Cenvat Credit on various services like architect services, authorized service station, interior decoration services, real estate agents services, and stock broker services.

Analysis:
The appellant availed Cenvat Credit on services like architect services, authorized service station, interior decoration services, real estate agents services, and stock broker services. Lower authorities issued a show-cause notice directing the appellant to justify the credit availed, citing Rule 2(1)(ii) of the Cenvat Credit Rules, 2004. The appellant contested the notice, arguing that all services were utilized for business purposes. The Adjudicating Authority disagreed, confirmed demands, imposed penalties, and demanded interest. The appellant appealed to the Commissioner (Appeals), challenging the Authority's jurisdiction beyond the notice's scope. The Commissioner upheld the original order, leading to the current appeal.

The appellant argued that services were used for marketing programs, vehicle maintenance, and stock trading, essential for business operations. The Departmental Representative contended that services outside the factory premises were not directly or indirectly utilized for manufacturing, hence not eligible for credit. The Tribunal considered both arguments and examined the services' utilization by the appellant.

The issue revolved around whether the services qualified as input services under Rule 2(l) of the Cenvat Credit Rules. The Tribunal analyzed each service's purpose and usage by the appellant. The definition of input service includes services used directly or indirectly in or in relation to manufacturing final products. Referring to the Hon'ble High Court of Bombay's interpretation in a similar case, the Tribunal emphasized that each limb of the definition could independently qualify for exemption. As the services in question were used for business purposes, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with consequential relief.

The Tribunal refrained from addressing other issues raised by the appellant due to the decision on the merit of the case. The judgment concluded by setting aside the impugned order and allowing the appeal based on the services' direct or indirect usage for business purposes, in line with the definition of input service under the Cenvat Credit Rules.