2016 (8) TMI 292 - AT - Service Tax

Cenvat credit - Service tax paid on immovable property rent on sale office - whether related to post removal of goods or not - place of removal - Held that - the appellant s case is squarely covered in the definition of input service and consequently appellant is entitled to cenvat credit of service tax paid on immovable property rent. - Decided in favour of appellant with consequential relief

Summary

Issues:
Appeal against denial of cenvat credit for service tax paid on rent charges for office premises.

Analysis:
The appeal was filed against the Commissioner (Appeals) order upholding the denial of cenvat credit for service tax paid on rent charges for office premises. The appellant, engaged in manufacturing excisable goods, availed the credit during the audit, which was later found ineligible. The adjudicating authority confirmed the demand, leading to the appeal. The appellant argued that the impugned order ignored the definition of "input service" and misinterpreted the scope of activities covered under it. The appellant referenced a previous case to support their claim that the definition of input service includes services beyond the main definition. The appellant contended that the impugned order failed to consider the specific entry of sales promotion in the definition of input services and wrongly questioned the nexus of activities with business and manufacturing.

The learned counsel for the appellant highlighted the discrepancies in the impugned order and emphasized that the definition of input service should be interpreted broadly to encompass various activities related to business and manufacturing. On the other hand, the learned AR supported the findings of the Commissioner (Appeals). The Tribunal examined the definition of input service under Rule 2(l) of the Cenvat Credit Rules 2004, which includes services used in various business activities such as modernization, renovation, sales promotion, market research, etc. The Tribunal noted that the denial of credit was based on the premise that the service was availed after the place of removal, but the appellant was engaged in sales promotion activities directly related to the business.

After considering the arguments and the definition of input service, the Tribunal concluded that the appellant's case fell within the definition of input service, entitling them to cenvat credit for service tax paid on immovable property rent. The appeal was allowed, setting aside the impugned order with any consequential relief. The judgment was pronounced in open court on 04.08.2016.