2014 (11) TMI 954 - AT - Customs

Denial of refund claim - CENVAT Credit - Held that - Without a building no manufacture can take place and therefore the service relating to building lease rent can be definitely said to be in or in relation to the manufacture. Similarly other services also are eligible. The observation of the original authority that fumigation charges has to be held as post-manufacturing expenses is not correct since without fumigation the goods cannot be cleared and exported. In this case since the goods are exported place of removal would be port and therefore the services upto the place of the removal would be covered. Overall I find that all the services can be said to be in or in relation to the manufacture or are covered by the definition of input service - Decided against Revenue.

Summary

Issues:
Refund claim eligibility under CENVAT Credit Rules, 2004 for various services.

Analysis:
The respondent filed a refund claim under Notification No. 05/2006 CE(NT) for an amount that was later revised. The original adjudicating authority denied the refund for several services including building lease rent, computer peripherals service, printer hiring charges, and others. On appeal, the Commissioner ruled in favor of the respondent, finding them eligible for the refund. The Revenue appealed this decision.

Upon hearing both sides, the judge noted the critical role of a building in the manufacturing process, stating that services related to building lease rent are directly linked to manufacturing activities. Similarly, other services were deemed eligible as they were either in or in relation to the manufacturing process. The judge disagreed with the original authority's classification of fumigation charges as post-manufacturing expenses, emphasizing their necessity for goods clearance and export. Since the goods were exported, the judge considered services up to the place of removal, in this case, the port, to be covered. Overall, the judge concluded that all the services in question could be categorized as in or in relation to the manufacture or fall under the definition of input service. Consequently, the appeal by the Revenue was deemed meritless and rejected.