2015 (2) TMI 829 - AT - Central Excise

Denial of Input service credit - as per Rule 2(l) of the CENVAT Credit Rules, 2004 assessee do not qualify as input service - Held that - On perusal of the records I find that the appellant used the services mentioned here-in during the course of manufacturing of goods as per Rule 2(l) of CENVAT credit as per the judgement of Ultratech Cement (2010 (10) TMI 13 - BOMBAY HIGH COURT). In these circumstances, I hold that the appellant is entitled to take CENVAT credit on the above services. In this term, the impugned order is set aside and the appeal is allowed with consequential relief, if any. - Decided in favour of assessee.

Summary

Issues:
- Denial of input service under Rule 2(l) of CENVAT Credit Rules, 2004
- Eligibility of various services for CENVAT credit

Analysis:
- The appellant, a manufacturer of excisable goods, appealed against the denial of input service based on Rule 2(l) of the CENVAT Credit Rules, 2004. The appellant availed services like Admin Housekeeping, Construction & Other civil services, Crane services, Valuation of plot, Electrification services, Air travel service, Personal Insurance, and Gratuity Scheme during manufacturing activities. The revenue issued a show-cause notice to deny CENVAT credit amounting to Rs. 26,21,939, which was confirmed by lower authorities. The appellant contended that these services were essential for their business activity and cited the case of CCE v. Ultratech Cement Ltd. - 2010 (260) ELT 369 (Bom.) to support their claim for CENVAT credit.

- The appellant's counsel argued that the services were integral to the manufacturing process, making them eligible for CENVAT credit. The Assistant Commissioner reiterated the findings of the impugned order. After hearing both parties and examining the records, the judge, Ashok Jindal, observed that the appellant had indeed utilized the mentioned services during manufacturing, aligning with Rule 2(l) of CENVAT credit and the precedent set by the Ultratech Cement case. Consequently, the judge ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with any necessary consequential relief.

- In conclusion, the judgment by Ashok Jindal of the Appellate Tribunal CESTAT MUMBAI resolved the issue of denial of input service under Rule 2(l) of CENVAT Credit Rules, 2004, by determining the eligibility of various services for CENVAT credit in the context of manufacturing activities. The decision emphasized the importance of considering the essentiality of services in the manufacturing process when determining CENVAT credit eligibility, as demonstrated by the appellant's successful appeal based on the utilization of services in line with relevant legal provisions and precedents.