2010 (10) TMI 777 - HC - Service Tax

CENVAT credit of Service Tax paid on Pandal & Shamyana Services and Insurance Services for discharging their duty liability, even if, they are not at all or remotely connected with the generation of Steam or electricity or manufacture of final products - Held that - Tribunal has already decided the above issue in favour of the assessee and against the revenue, the question on which the appeal has been admitted is a question of fact which has been finally decided by the Tribunal in favour of the assessee, appeal dismissed.

Summary

Issues:
Interpretation of the term "input services" under Rule 2(l) of the CENVAT Credit Rules, 2004 for allowing CENVAT credit on services not directly connected with the generation of Steam or electricity or manufacture of final products.

Analysis:
The appeal challenged an order passed by the Customs, Excise and Service Tax Appellate Tribunal, where the revenue questioned the interpretation of "input services" under Rule 2(l) of the CENVAT Credit Rules, 2004. The Tribunal allowed CENVAT credit on various services, including Landline Telephones, Cleaning and Maintenance of Garden, Pandal Samiyana Services, and Group insurance. The Tribunal found no justification to deny credit for landline telephones used in staff residences, approved credit for exigency-related services like Pandal and Shamyana, remanded the matter of garden services for verification, and upheld the credit for Group Insurance Services based on precedents from Mumbai and Bangalore Tribunals.

The High Court analyzed the definition of "input service" under Rule 2(l) of the CENVAT Credit Rules, 2004, which includes services used directly or indirectly in providing output services or in relation to the manufacture of final products. The definition encompasses various services such as accounting, auditing, and transportation. The Court highlighted that the determination of whether a service qualifies as an input service is a factual inquiry to be decided based on the circumstances of each case. It emphasized that the Tribunal's decision on this matter is final as it is the ultimate authority on facts. As the Tribunal had already ruled in favor of the assessee regarding the eligibility of the services in question as input services, the High Court concluded that the appeal lacked merit and dismissed it accordingly.