2012 (7) TMI 822 - AT - Central Excise

Availment of CENVAT Credit - whether the appellants are entitled to input service credit of the aircraft used by their Managing Director for business activity or not - Held that - appellants have availed the services of aircraft in the course of their business activity they are entitled to input service credit. Now the adjudicating authority has verify the fact whether the appellants have used the aircraft for the business activity or not and if it is proved that the appellants have used the aircraft in their business activity they are entitled to input service credit - Following decision of Commissioner of Central Excise Nagpur v. Ultratech Cement Ltd. reported in 2010 (10) TMI 13 - BOMBAY HIGH COURT - Decided in favour of assessee.

Summary

Issues:
- Denial of input service credit for maintenance of aircraft used in business activity
- Requirement of documentary evidence to prove aircraft usage
- Entitlement to input service credit for services availed in the course of business of manufacturing

Analysis:
The judgment revolves around the denial of input service credit to the appellants for the maintenance of aircraft used in their business activity. The adjudicating authority had refused the credit due to the lack of documentary evidence demonstrating the aircraft's utilization by the Managing Director in the business. The consultant for the appellants argued that they were entitled to the credit as the services were availed in the course of their manufacturing business. The consultant cited a relevant decision supporting their claim. On the contrary, the respondent contended that the appellants had not proven the aircraft's use for business activities and thus were not eligible for the credit as it was not related to manufacturing.

Upon hearing both parties, the judge referred to a previous case where it was established that services availed in the business of manufacturing qualified for input service credit. Therefore, the judge concluded that if the aircraft services were utilized in the business activity, the appellants were entitled to the credit. The judge instructed the adjudicating authority to verify whether the aircraft was indeed used in the business activity. If proven, the appellants would be eligible for the input service credit. The judgment emphasized the importance of establishing the connection between the services availed and the business activity to claim the credit. The appeal was disposed of with these directives, highlighting the significance of proper documentation and evidence to support claims for input service credit.