2009 (1) TMI 117 - AT - Service Tax

CENVAT credit of service tax paid on merger charges, charges for issuance of NOC, annual custody fees and maintenance of fax machine revenue submits that these activities cannot be said to be related to the manufacturing activity directly or indirectly and therefore the credit is not admissible impugned services are covered by definition of Input services therefore, credit cannot be denied assessee s appeal allowed

Summary

Issues:
Admissibility of CENVAT credit for service tax paid on merger charges, charges for issuance of NOC, annual custody fees, and maintenance of fax machine.

Analysis:
The appeal challenged the Commissioner (Appeals) decision denying CENVAT credit for service tax paid on specific services. The Appellant's consultant argued that merger charges fall under financing services, NOC issuance relates to borrowing activities, annual custody fees are connected to share registry operations, and fax machine maintenance is akin to telephone services for officers. The JCDR contended that these services are not directly or indirectly linked to manufacturing activities, thus not admissible for credit.

Upon review, the Member (Technical) noted that the definition of input service includes services not directly related to manufacturing. The intention is to allow CENVAT credit for services beyond manufacturing scope. The Member found the denied services - merger, NOC issuance, share registry, and fax machine maintenance - align with the listed service categories. Consequently, the appeal was allowed, granting the appellants the CENVAT credit with consequential relief.

This judgment underscores the broad interpretation of input services for CENVAT credit eligibility. It emphasizes that services need not be directly manufacturing-related to qualify for credit, as long as they fall within the defined service categories. The decision clarifies that services like merger charges, NOC issuance, custody fees, and maintenance expenses can be considered eligible for CENVAT credit, expanding the scope of credit availability beyond traditional manufacturing activities.