2016 (9) TMI 490 - AT - Service Tax

Cenvat credit - Courier Service, Insurance Service, Catering Service, Rent-a-cab Service and Civil electrical Repair Service - Cenvat credit taken on outdoor catering service prior to 01.04.2011 and no input service credit have been taken on outdoor catering service after 01.04.2011 - Civil Electrical & Repair service also availed prior to 01.04.2011 - Held that - as the ld. Commissioner (A) in the impugned order has observed that courier service has been received by the respondent for dispatch of misc documents/material/samples which is directly related to the manufacturing activity, insurance service, has been availed for insurance of laptop and medical accidental insurance of employees which is directly related to manufacturing activity, rent a cab service has been used for procurement of inputs/sale promotion/banking and other financial accounting purposes which are directly related to their manufacturing activity, also the Civil Electrical & Repair service, has been availed for renovation to factory premises prior to 01.04.2011, Therefore, all these services are entitled to take cenvat credit. With regard to the outdoor Catering service for the period prior to 01.04.2011, the respondent is entitled to take cenvat credit in the light of the decision in the case of Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT . Further, post 01.04.2011, the respondent is not entitled to take cenvat credit but it is the contention of respondent that the amount of ₹ 27,892/- pertains to the period prior to 01.04.2011 has not been coming out of the impugned order. Therefore, for verification of this fact by the adjudicating authority whether the respondent has not taken any cenvat credit on outdoor catering service after 01.04.2011 and holding that the respondent is entitled to take the cenvat credit on courier service, insurance service, rent a cab, civil electrical or repair service and outdoor catering service for the period prior to 01.04.2011, remanded back to the adjudicating authority. - Appeal disposed of

Summary

Issues:
- Entitlement to cenvat credit on various services prior to and after 01.04.2011.
- Interpretation of Rule 2(I) of the Cenvat Credit Rules, 2004.
- Direct relation of services to manufacturing activity.
- Verification of cenvat credit claims by the adjudicating authority.

Analysis:
The judgment deals with the appeal by the Revenue against an order allowing cenvat credit on services including courier, insurance, catering, rent-a-cab, and civil electrical repair. The Revenue argued that these services did not qualify as input services under Rule 2(I) of the Cenvat Credit Rules, 2004. The respondent contended that they were entitled to the credit as the services were directly related to manufacturing activities.

The Tribunal considered each service individually. Regarding courier service, it was found to be directly related to manufacturing activity as it involved dispatch of documents/materials, hence cenvat credit was allowed. Similarly, for insurance service covering laptops and medical accidents of employees, the credit was permitted due to its direct relation to manufacturing. Rent-a-cab service was deemed eligible as it was used for procurement and other activities related to manufacturing. Civil electrical repair service for factory renovation was also considered eligible for credit.

However, the Tribunal noted that post 01.04.2011, the respondent was not entitled to credit for outdoor catering service. The respondent claimed that the amount related to this service before 01.04.2011 was not addressed in the impugned order. Therefore, the case was remanded to the adjudicating authority for verification. The authority was directed to ensure no credit was taken post-2011 and to verify the claims for courier, insurance, rent-a-cab, civil electrical repair, and outdoor catering services pre-2011. The respondent was instructed to provide necessary documents for verification.

In conclusion, the appeal was disposed of with the decision to remand the case for further verification by the adjudicating authority. The judgment emphasized the direct relation of services to manufacturing activities as a key factor in determining entitlement to cenvat credit.