2019 (8) TMI 1569 - AT - Central Excise

CENVAT Credit - input services - Detective services - surveying the market and organizing raids at various premises to detect and prevent marketing of spurious duplicate of their products - HELD THAT - The said services so received by the appellant were for surveying the market and pointing out the manufacturer and clearance of the appellant s spurious products. Admittedly the said services are in relation to the appellant's business. On going through the definition of services as defined under Rule 2(l) of the Cenvat Credit Rules, it is found that the same takes into its ambit the services used by the manufacturer directly or indirectly for manufacture as well as for clearance of the final product. The inclusive part of the said definition referred to the services used for market research as well as activities relating to business. The said definition is not exhaustive and is inclusive definition. Even if the inclusive part of the definition is considered, the services relating to market research have been held as admissible Cenvatable input services - The services obtained by the appellant from M/s. BLS Detective Services Pvt. Ltd. are nothing but market research services. The same are for the purpose of surveying the market for finding out the various units who were engaged in manufacturing appellant s spurious products and marketing the same. Admittedly said activity has a relation with the business activities of the appellant and there is direct nexus with the appellant s business activities. Credit allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of Cenvat credit for repair and maintenance of lifts.
2. Denial of Cenvat credit for services provided by a detective agency for market survey and raids.

Analysis:
1. The appellant, engaged in manufacturing Chewing Tobacco, received a show cause notice proposing denial of Cenvat credit for Service Tax amounting to &8377; 49,349/- related to repair and maintenance of lifts. The Original Adjudicating Authority confirmed the demand and penalties, but on appeal, the Commissioner (Appeals) allowed the credit for repair and maintenance of lifts as they were used for movement of goods. The issue was whether this credit should be admissible.

2. The second issue involved denying the Cenvat credit of &8377; 3,99,228/- for services provided by a detective agency for market survey and raids to prevent marketing of spurious products. The Commissioner (Appeals) denied this credit, leading to the present appeal. The question was whether the Service Tax paid for services by the detective agency should be considered admissible as credit to the appellant.

3. The Tribunal examined the definition of services under Rule 2(l) of the Cenvat Credit Rules, which includes services used directly or indirectly for manufacture or clearance of the final product. The definition also encompasses market research and business-related activities as admissible Cenvatable input services. The services provided by the detective agency for surveying the market and identifying manufacturers of spurious products directly related to the appellant's business activities.

4. The Tribunal concluded that the services obtained from the detective agency were essentially market research services aimed at identifying units engaged in manufacturing and marketing spurious products related to the appellant's business. Given the direct nexus with the appellant's business activities, the Tribunal held that the Cenvat credit for these services was admissible.

5. Consequently, the impugned order denying the Cenvat credit for services provided by the detective agency was set aside, and the appeal was allowed with consequential relief to the appellant. The decision was pronounced in open court, granting the appellant relief in this matter.