2015 (3) TMI 294 - AT - Central Excise

CENVAT Credit - whether courier services, clearing and forwarding services, cargo-movers services and housekeeping services are input services as per the definition of input service vide Rule 2(l) of CENVAT credit Rules, 2004 - Held that - all the four services in question are input services relating to the manufacturing activity of the appellant. The impugned order is set aside - Following decision of Commissioner of Central Excise Vs. Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT - Decided in favour of assesse.

Summary

Issues Involved: Whether courier services, clearing and forwarding services, cargo-movers services, and housekeeping services are considered input services under Rule 2(l) of the CENVAT Credit Rules, 2004.

Analysis:

Issue 1: Input Services Definition
The primary issue in this appeal revolves around determining whether various services, including courier, clearing, forwarding, cargo-movers, and housekeeping services, qualify as input services under Rule 2(l) of the CENVAT Credit Rules, 2004. The appellant, engaged in manufacturing excisable goods, contested that these services are integral to their manufacturing activities, while the Department argued that these services pertain to post-removal and post-manufacturing activities, thus not directly related to the manufacturing process.

Issue 2: Appellant's Contentions
The appellant's counsel cited previous Tribunal orders that favored the appellant's position regarding the classification of the disputed services as input services. These orders specifically highlighted instances where housekeeping, courier and forwarding services, clearing and forwarding agency services, and cargo movers services were deemed as input services. Additionally, the appellant referenced a ruling by the Hon'ble Bombay High Court in the case of Commissioner of Central Excise Vs. Ultratech Cement Ltd., which interpreted the broad scope of the definition of input services under Rule 2(l) of the CENVAT Credit Rules. The High Court's decision emphasized that the definition encompasses services used not only directly or indirectly in manufacturing but also post-manufacturing activities related to the business of manufacturing the final product.

Issue 3: Department's Response
The Assistant Commissioner representing the Department acknowledged that the dispute had been previously settled in favor of the appellants based on earlier Tribunal decisions. Thus, the Department did not contest the applicability of the disputed services as input services in the current appeal.

Judgment
After considering the arguments presented by both parties and in alignment with the precedent set by previous Tribunal orders and the interpretation of the High Court ruling, the judge, Anil Choudhary, concluded that all four services in question-courier services, clearing and forwarding services, cargo-movers services, and housekeeping services-are indeed input services directly linked to the manufacturing activities of the appellant. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief. Furthermore, the extension application was deemed infructuous in light of the judgment.

In summary, the judgment reaffirmed the broad interpretation of input services under the CENVAT Credit Rules, emphasizing the inclusion of services not only directly associated with manufacturing but also those supporting post-manufacturing activities essential to the business of manufacturing the final product.