9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (5) TMI 540 - HC - Service TaxCENVAT Credit - Whether the Service Tax credits on services of Insurance for residential colony buildings is admissible, when such services are not related directly or indirectly to the manufacture of final product, as input service defined under Rule 2(l) of the Cenvat Credit Rules, 2004 - Held that - Decision of Gujarat Heavy Chemicals Ltd. 2011 (5) TMI 132 - GUJARAT HIGH COURT followed - though there is somewhat difference in the nature of services involved in the present appeals, insofar as all material aspects are concerned, the entire issue has been discussed threadbare and decided in the above-mentioned judgment in the case of Gujarat Heavy Chemicals Ltd. As already noted, in the case of Gujarat Heavy Chemicals Ltd., the Court was considering the eligibility of the manufacturer to avail Cenvat credit on the Service Tax credit on security services in residential colony of the Company. In the present case, the issue presented before us pertains to Service Tax credit on insurance of the vehicles. We may notice that such vehicles are used only for the residents of the colony and not for the business purpose of the Company. - assessee would not be entitled to Cenvat credit on Service Tax paid on such services - Decided against the assessee.
Issues:
Challenge to Tribunal's judgment on admissibility of Service Tax credits on insurance services for residential colony buildings as input service under Cenvat Credit Rules, 2004. Analysis: 1. The case involved a challenge by the Revenue against the Tribunal's decision allowing Cenvat credit claimed by a cement manufacturer on Service Tax paid for insurance services for a residential colony. The issue was whether such services were directly or indirectly related to the manufacture of the final product, as required under the Cenvat Credit Rules. 2. The Tribunal upheld the assessee's claim, stating that the inclusive part of the definition of input service encompassed such services under "activities relating to business." The Tribunal distinguished a previous Apex Court decision and relied on a Delhi Bench judgment to support its decision. 3. The Revenue contended that the services were not utilized for manufacturing the final product and thus did not fall within the definition of 'input service.' The respondent's counsel supported the Tribunal's decision, arguing that no legal question arose. 4. Referring to a previous decision involving security services, the Court analyzed whether security services provided by the manufacturer in residential quarters for workers could be considered an 'input service.' The Court concluded that such services did not have a direct or indirect relation to the manufacturing activity, in line with a Bombay High Court decision. 5. The Court emphasized that the definition of 'input service' under the Cenvat Rules was exhaustive and did not encompass services like security provided voluntarily by the manufacturer for workers. The Court also referred to a relevant decision regarding outdoor catering services to distinguish the present case. 6. Ultimately, the Court allowed the Revenue's appeal, ruling in favor of the Revenue and setting aside the Tribunal's judgment. The Court highlighted that the issue had been extensively discussed and decided in a previous judgment, which concluded that the manufacturer was not entitled to Cenvat credit for such services. 7. Based on the precedent set in the previous case, the Court held that the assessee was not entitled to Cenvat credit on Service Tax paid for insurance of vehicles used exclusively for residents of the colony, not for business purposes. The decision of the Tribunal was reversed, and all tax appeals were allowed accordingly.
|
