2014 (1) TMI 995 - AT - Service Tax

Availment of CENVAT Credit - Whether the appellant are entitled for Cenvat credit of Management Consultancy Service as per Rule 2(l) of the Cenvat Credit Rules, 2004 or not - Held that - any service availed by a manufacturer of excisable goods in the course of their business activity is entitled for input service credit. It is undisputed that this Management Consultancy Service has been availed by the appellant in their business of manufacturing. Therefore, following the decision in Ultratech Cement 2010 (10) TMI 13 - BOMBAY HIGH COURT , Appellants are entitled for input service credit on Management Consultancy Service - Stay granted.

Summary

Issues:
Entitlement to Cenvat credit of Management Consultancy Service under Rule 2(l) of Cenvat Credit Rules, 2004.

Analysis:
The judgment by the Appellate Tribunal CESTAT Mumbai addressed the issue of whether the appellant was entitled to Cenvat credit of Management Consultancy Service under Rule 2(l) of the Cenvat Credit Rules, 2004. The appellant, engaged in manufacturing excisable goods, had undergone a merger with Prithvi Consultancy Service during the relevant period and had engaged a management consultant for the merger process. The Revenue contended that the service did not have a nexus with the manufacturing activity, thus denying Cenvat credit. However, the appellant challenged this view, seeking relief from the order.

The Tribunal referred to a precedent set by the Hon'ble High Court of Bombay in the case of Ultratech Cement Ltd., where it was established that any service availed by a manufacturer in the course of their business activity is eligible for input service credit. Given that the Management Consultancy Service was utilized by the appellant in their manufacturing business, the Tribunal concluded that they were indeed entitled to input service credit based on the decision in Ultratech Cement. Consequently, the appeal was allowed, granting the appellants the relief sought.

In conclusion, the judgment clarified the entitlement of the appellant to Cenvat credit for the Management Consultancy Service, emphasizing the applicability of input service credit for services availed in the course of business activities, as established by the precedent set by the Hon'ble High Court of Bombay. The decision provided clarity on the interpretation of the relevant rules and upheld the appellant's right to claim the credit, ultimately allowing the appeal with consequential relief.