2018 (11) TMI 1588 - AT - Central Excise

CENVAT credit - input services - maintenance of streetlight, road light, etc paid to Rajasthan Industrial Investment Corporation - Held that - Availability of suitable industrial plot is an essential requirement for manufacture of the goods of the appellant-assessee, which are excisable, admittedly - the appellant is entitled to Cenvat Credit on the maintenance charges by whatever name called, paid to RIICO, for receipt of services in the nature of maintenance of street light, road, water service, etc. - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the appellant rightly took Service Tax credit on maintenance of streetlight, road light, etc paid to Rajasthan Industrial Investment Corporation.
- Whether the Cenvat credit was rightly denied to the appellant under the provisions of rule 2(l) of CCR, 2004.

Analysis:
1. The issue in this appeal revolved around the appellant's entitlement to Service Tax credit on maintenance services provided by Rajasthan Industrial Investment Corporation (RIICO) and the denial of Cenvat credit under rule 2(l) of CCR, 2004. The Ld. Commissioner (Appeals) noted that the appellant availed Cenvat Credit on the service tax paid for annual service charges related to the maintenance of the Industrial estate. The appellant argued that these activities were integral to manufacturing and fell under the inclusive definition of input services as per Rule 2(l) of the Cenvat Credit Rules, 2004. However, the Ld. Commissioner found that the services provided by RIICO were common to all industries in the Industrial estate and lacked a direct nexus with the manufacturing activities of the appellant.

2. The Ld. Commissioner referred to a case involving Panasonic Energy India Company Ltd, where the Tribunal allowed Cenvat credit on infrastructure development charges collected along with lease rent for providing infrastructure services related to manufacturing activities. However, the Ld. Commissioner distinguished this ruling from the present case, emphasizing that the issue here pertained to the eligibility of Cenvat Credit on services provided outside by RIICO for maintenance purposes.

3. After considering the arguments, the Tribunal held that the availability of an industrial plot was essential for the manufacturing activities of the appellant. Consequently, the Tribunal ruled in favor of the appellant, stating that they were entitled to Cenvat Credit on maintenance charges paid to RIICO for services like street light, road maintenance, and water services. The appeal was allowed, the impugned order was set aside, and the appellant was deemed eligible for Cenvat Credit.

In conclusion, the judgment clarified the criteria for claiming Cenvat Credit on maintenance services provided by RIICO, emphasizing the necessity of establishing a direct or indirect nexus between the services and manufacturing activities to qualify for such credits under the Cenvat Credit Rules, 2004.