2015 (12) TMI 157 - AT - Service Tax

Disallowance of CENVAT Credit - Nexus with manufacture - Held that - Perusal of the substance and evidence of the case on record indicates that the Service Tax paid in respect of the services, viz., rent at Ludhiana, insurance for sugar stacked at Ludhiana and Commission on sugar sale at Ludhiana after clearance from factory appear to be integral part of the manufacturing and sale activity in the eyes of law. Therefore, Cenvat credit of few services is allowed - Decided partly in favour of assessee.

Summary

Issues:
Claim of Cenvat credit for various services under Service Tax.

Analysis:
The appellant claimed Cenvat credit for different services related to manufacturing activities. The specific services included rent at Ludhiana, insurance for sugar stacked at Ludhiana, and commission on sugar sale at Ludhiana after clearance from the factory. The appellant's counsel argued against the disallowance, contending that these services were integral to the manufacturing and sale activities. The tribunal examined the substance and evidence on record and agreed that the services in question were indeed essential parts of the manufacturing and sale process. Consequently, the tribunal allowed the Cenvat credit amounts of Rs. 64,890, Rs. 55,373, and Rs. 2,793 for the rent, insurance, and commission services, respectively. The tribunal partially allowed the appeal, ruling in favor of the appellant and deciding that no penalty would be imposed on the demands related to these services.