2014 (8) TMI 90 - HC - Central Excise

Cenvat Credit - input service - motor cab - appellant had used the bus for its staff - Nexus with manufacturing activity - Held that - the department s case was that the bus was being used to transport the employees of the appellant and contended that CENVAT credit could only be given to motor cab and could not be given to a bus since more than six passengers travel on a bus - Tribunal has gone beyond the pleadings in rejecting the appeal of the appellant, on the ground, that no evidence was filed to show that the bus was actually being used to ferry the employees of the appellant. Cenvat Credit on event management programme - denial of credit on the ground that expenses were incurred outside the factory premises - Held that - There was no dispute before the lower appellate authority that the event management programme had not occurred and expenses were not incurred by the appellant. The question of filing proof of such expenses before the Tribunal consequently did not arise. The Tribunal committed a manifest error in rejecting the appeal of the appellant, on the ground, that no proof of the event taking place, had been filed by the appellant, such as poster, photograph and advertisement. An opportunity should have been given by the Tribunal to the appellant to produce such evidence before the Tribunal - matter remanded back - Decided in favor of assessee.

Issues: Appeal under Section 35-G of the Central Excise and Salt Act regarding disallowance of CENVAT credit on certain services, including bus transportation and event management services.

Analysis:
The appellant availed CENVAT Credit on specific services, with the adjudicating authority issuing a show cause notice regarding the lack of proper documents and the direct or indirect use of services in relation to manufacturing. The authority accepted the plea of the appellant, stating that all required documentation was maintained and the services were directly connected to manufacturing activities, falling under the definition of "input service." The department filed an appeal, challenging the admissibility of CENVAT credit on bus service and event management, arguing that these services did not qualify as input services. The appellate authority allowed the appeal, stating that the bus was not a motor cab and the event management was not conducted within the factory premises, hence not eligible for CENVAT credit.

The appellant, dissatisfied with the appellate order, appealed to the Tribunal, arguing that sales promotion activities could not be confined to factory premises and that bus transportation for staff was integral to the business, justifying CENVAT credit. The Tribunal dismissed the appeal, citing lack of evidence regarding staff transportation and event management's impact on sales promotion. The appellant then filed the present appeal, questioning the Tribunal's findings and seeking clarification on the definition of "input service."

The High Court observed that the Tribunal exceeded the parties' admitted case by rejecting the appeal based on non-disputed grounds. Regarding bus transportation, the department acknowledged the use of the bus for employee transport, but the Tribunal demanded evidence, which was unnecessary as the usage was not in dispute. Similarly, the Tribunal erred in rejecting the appeal on event management expenses outside the factory premises, as there was no dispute about the event not occurring. The Court held that the Tribunal should have allowed the appellant to provide evidence if required, quashing the Tribunal's order and remitting the matter for fresh consideration.

In conclusion, the High Court allowed both appeals, directing the Tribunal to reconsider the case based on the observations made. The Court emphasized the importance of providing opportunities for evidence presentation and upheld the appellant's right to claim CENVAT credit on the services in question.

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