2016 (9) TMI 144 - AAR - Service Tax

CENVAT credit input service Held that - the applicant would be entitled to the expenses meant for input services and would be entitled to the cenvat credit only in respect of the input services. Similar issue held in the case 2015 (7) TMI 825 - Advance Ruling Authority . Eligibility of input services related to Capital goods - Applicability of decision in the case M/s Bharati Airtel Vs Commissioner of Central Excise Act, Pune-III, Bomaby High Court 2014 (9) TMI 38 - BOMBAY HIGH COURT and other rulings - Held that - input is different from input service. This being a major difference, the rulings relating to inputs and capital goods will not be applicable to the present case where we have considered the terminology input service .

Summary

Issues:
1. Entitlement to cenvat credit for input services.
2. Differentiation between input and input services.

Entitlement to Cenvat Credit for Input Services:
The judgment pertains to the entitlement of cenvat credit for input services. The ruling is based on a previous decision where it was established that cenvat credit can be claimed for input services. The current case is deemed similar to the previous ruling, leading to the conclusion that the applicant is entitled to expenses related to input services and can claim cenvat credit only for these services.

Differentiation between Input and Input Services:
Another argument raised in the case was regarding the differentiation between input and input services. The department contended that certain precedents, such as M/s Bharati Airtel Vs Commissioner of Central Excise Act, Pune-III and Indus Tower (Tribunal) Larger Bench, suggested that inputs embedded in earth are not considered goods and, therefore, cannot be classified as capital goods. However, the Tribunal rejected this argument, emphasizing that there is a distinction between input and input services. The Tribunal clarified that the term "input services" was the focus of the current case, not just "input," rendering the cited precedents inapplicable. Consequently, the arguments regarding the embedded nature of inputs were dismissed.

This comprehensive analysis of the judgment highlights the key issues addressed by the Authority for Advance Rulings, providing a detailed overview of the decision-making process and the legal reasoning behind the conclusions reached in the case.