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2016 (1) TMI 65 - AT - Central ExciseDenial of CENVAT Credit - manufacture of Packaging Materials - Denial of credit on various input services namely CHA, Banking, Mobile Bills, Pest Control Service, Courier Service and Shipping Service - Held that - CENVAT credit was denied on various input services namely CHA, Banking, Mobile Bills, Pest Control Service, Courier Service and Shipping Service etc. By the impugned order, the Commissioner (Appeals) observed that these services are not covered within the definition of input service under Rule 2 (l) of CENVAT Credit Rules, 2004. It has also observed that the appellants had not provided any documents such as factory/export invoices, CHA bills, Banking bills, Mobile bills etc. - in the case of Cadila Healthcare Ltd. (2013 (1) TMI 304 - GUJARAT HIGH COURT) allowed the input service credit namely Technical Testing and Analysis Service, Technical Inspection and Certification Service, Courier Service etc. Further the case laws cited by the learned advocate, held that all the input services are admissible for CENVAT credit. Hence, the appellants are eligible to avail the CENVAT credit on these items. The purported Show Cause Notice proposed to deny CENVAT credit on these items and it would not covered with the definition of the input service. The Tribunal and the High Court in various decisions held that these are the input services are covered within the definition of input service. So, the finding of the Commissioner (Appeals) has no force. In any view, the Department is always at liberty to verify the documents. - Decided in favour of assessee.
Issues: Denial of CENVAT credit on various input services including CHA, Banking, Mobile Bills, Pest Control Service, Courier Service, and Shipping Service.
Analysis: 1. Issue of Denial of CENVAT Credit: The case involved the denial of CENVAT credit on multiple input services by the Adjudicating Authority, which was confirmed by the Commissioner (Appeals). The input services in question were CHA, Banking, Mobile Bills, Pest Control Service, Courier Service, and Shipping Service. The Commissioner (Appeals) ruled that these services did not fall within the definition of input service under Rule 2(l) of CENVAT Credit Rules, 2004, as the appellants failed to provide supporting documents such as factory/export invoices, bills, and receipts. 2. Legal Precedents and Arguments: The appellants argued that previous decisions by the Hon'ble High Court and the Tribunal had established that the contested input services were indeed covered under the definition of input service. They cited specific cases such as Commissioner vs Dynamic Industries Ltd., MPI Machines Ltd. vs Commissioner of Central Excise, and others to support their claim. On the other hand, the Authorised Representative for the Revenue contended that these input services lacked a direct nexus with the manufacturing process, relying on the decision of the Hon'ble Gujarat High Court in the case of Commissioner of Central Excise vs Cadila Healthcare Ltd. The representative emphasized that certain services, like commission paid to foreign agents, were not eligible for CENVAT credit as they were related to sales rather than production. 3. Judicial Interpretation and Decision: The Hon'ble Member (Judicial) analyzed the arguments presented by both sides and reviewed the relevant case laws. It was noted that while the Hon'ble Gujarat High Court had denied CENVAT credit in specific instances, other cases had allowed credit for similar input services like Technical Testing and Analysis Service, Courier Service, etc. The Member concluded that based on the precedents and legal interpretations, the appellants were entitled to avail CENVAT credit on the contested input services. The impugned order was set aside, and the appeal filed by the appellant was allowed, emphasizing that the Department could verify the documents if necessary. 4. Conclusion: The judgment by the Appellate Tribunal CESTAT AHMEDABAD, delivered by Hon'ble Member (Judicial) P.K. Das, overturned the decision of the Commissioner (Appeals) regarding the denial of CENVAT credit on various input services. The ruling highlighted the importance of legal precedents and interpretations in determining the eligibility of input services for credit, ultimately allowing the appellant's appeal and emphasizing the need for document verification by the Department if required.
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