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2016 (3) TMI 394 - AT - Central ExciseCENVAT credit on input services denied - Held that - Assessee are not disputing the denial of CENVAT credit on Authorised Service Station, Manpower Recruitment Service and Convention Service after considering the amount itself as ₹ 5.00, 74,620.00 and ₹ 1,989.00 respectively. In view of the above discussions, the impugned order is modified to the extent the denial of CENVAT credit on Chartered Accountant Service and Outdoor Catering Servic (subject to reversal of the credit by the staff), Advertisement Service is set-aside. The denial of CENVAT credit on the other input services are upheld. Penalties are set-aside. The appeal filed by the appellant is disposed of in the above terms. The application for extension of stay order is dismissed as infructuous.
Issues Involved:
1. Denial of CENVAT credit on input services including Chartered Accountant Service, Security Service, Outdoor Catering Service, Tour Operator and Rent a Cab Service, and Advertisement Agency. 2. Interpretation of input service eligibility under CENVAT Credit Rules. 3. Comparison of decisions from different tribunals and high courts regarding input service credit. Analysis: 1. Denial of CENVAT Credit on Input Services: The case involved the denial of CENVAT credit to the appellants for various input services under the CENVAT Credit Rules. The Adjudicating Authority had denied the credit for services such as Chartered Accountant Service, Security Service, Outdoor Catering Service, Tour Operator and Rent a Cab Service, and Advertisement Agency. The denial was based on the perceived lack of direct or indirect relation to the manufacturing process or final products. The appellants contested these denials, arguing that the services were indeed eligible for credit as they fell within the definition of input services. 2. Interpretation of Input Service Eligibility: The key issue revolved around the interpretation of whether the input services availed by the appellants were directly or indirectly related to the manufacturing process or final products. The appellants argued that services like Chartered Accountant Service, Security Service, Outdoor Catering Service, Tour Operator and Rent a Cab Service, and Advertisement Agency were essential for their operations and should qualify for CENVAT credit. They cited relevant tribunal and high court decisions to support their claims, emphasizing that these services were covered under the scope of input services as per the CENVAT Credit Rules. 3. Comparison of Decisions on Input Service Credit: The arguments presented by both sides included references to various decisions from different tribunals and high courts regarding the eligibility of input services for CENVAT credit. The appellants relied on precedents that supported their position, highlighting cases where similar services had been deemed eligible for credit. On the other hand, the Revenue referred to specific judgments, such as the one by the Hon'ble Gujarat High Court, to justify the denial of credit for certain services like Security Service provided at residential quarters. The Tribunal analyzed these contrasting decisions and ultimately ruled in favor of the appellants for some services while upholding the denial for others based on the direct or indirect relation to manufacturing criteria. In conclusion, the Tribunal modified the impugned order, allowing CENVAT credit for Chartered Accountant Service, Outdoor Catering Service (subject to credit reversal), and Advertisement Service, while upholding the denial for other input services. Penalties were set aside, and the appeal was disposed of accordingly. The decision highlighted the importance of establishing a clear link between input services and their relevance to the manufacturing process or final products to determine eligibility for CENVAT credit.
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