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2016 (11) TMI 99 - AT - Central ExciseDenial of CENVAT credit - input services - office on rent - car parking services - Rule 2(l) of CCR, 2004 - Held that - reliance placed on the decision of KPMG vs. CCE, New Delhi 2013 (4) TMI 493 - CESTAT NEW DELHI where it was held that car parking facilities is held to constitute input service and eligible to claim CENVAT credit. Reliance also placed on the decision of Carrier Airconditioning & Refrigeration Ltd. vs. CCE 2016 (4) TMI 103 - CESTAT CHANDIGARH where it was held that the renting of immovable property for setting marketing office fall in the definition of input service and the assessee is entitled to take CENVAT credit on these services. CENVAT credit on both services allowed - appeal allowed - decided in favor of appellant.
Issues:
Appeal against Order-in-Appeal upholding Order-in-Original but dropping penalty on appellant for irregular availment of CENVAT credit on service tax paid for office rental and car parking charges. Analysis: The appeals were directed against a common Order-in-Appeal by the Commissioner (A) upholding the Order-in-Original but dropping the penalty imposed on the appellant for availing CENVAT credit on service tax paid for office rental and car parking charges. The appellants were engaged in manufacturing Access Control Cards and Card Holders, availing CENVAT credit under CENVAT Credit Rules, 2004. A show-cause notice was issued alleging irregular availment of CENVAT credit on rental payments for office and car parking, which was confirmed by the Assistant Commissioner. The appeals were filed before the Commissioner (A), who upheld the Order-in-Originals but dropped the penalty. The counsel for the appellant argued that the impugned order ignored precedent decisions on the issue, wrongly holding that the credit of input service tax on rent for car parking and sales office was not used directly or indirectly in relation to manufacturing final goods. The counsel contended that the definition of input service under CCR, 2004 should be interpreted broadly to include any service used by the manufacturer in relation to manufacturing final products. The counsel cited various authorities to support this argument, including decisions such as CCE vs. Ultratech Cement Ltd., Coca Cola India Pvt. Ltd. vs. CCE, and KPMG vs. CCE, New Delhi, among others. Moreover, the counsel referenced specific cases like Desert Inn Ltd. vs. CCE, Jaipur, Bharat Fritz Werner Ltd. vs. CCE, and Carrier Airconditioning & Refrigeration Ltd. vs. CCE, where it was held that services like car parking facilities and renting of immovable property for setting up a marketing office constitute input services eligible for CENVAT credit. Relying on the decisions in these cases, the appeals were allowed by setting aside the impugned order, granting consequential relief to the assessee. The judgment was delivered on 23/09/2016 by setting aside the impugned order and providing relief to the appellant based on the broad interpretation of input services and precedent decisions supporting the eligibility of CENVAT credit on services like office rental and car parking charges used in relation to manufacturing activities.
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