2016 (11) TMI 100 - AT - Central Excise

CENVAT credit - input services - Rule 2(l) of the CENVAT Credit Rules 2004 - legal services - repair and maintenance services of elevator - recovery u/r 14 of the CENVAT Credit Rules 2004 read with Section 11A of the Central Excise Act - Held that - the disputed services namely legal services and erection and commissioning of elevator fall in the definition of input services as they are integrally connected with the business activities of the appellant. Reliance placed on the decision of CCE Nagpur Vs Ultratech Cement Ltd 2010 (10) TMI 13 - BOMBAY HIGH COURT where Hon ble High Court of Bombay has given a very vide definition of input services which expression includes activities relating to business - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Alleged wrongful availment of CENVAT credit for legal services and elevator maintenance services.

Detailed Analysis:

1. Facts and Allegations: The appellant, engaged in manufacturing industrial adhesives, faced a show-cause notice for allegedly wrongly availing CENVAT credit for legal services and elevator maintenance services during March 2010 to May 2011.

2. Legal Provisions Involved: The Revenue contended that these services did not qualify as input services under Rule 2(l) of the CENVAT Credit Rules 2004, making the availed service tax liable for disallowance under Rule 14 of the same rules.

3. Initial Orders: The Assistant Commissioner confirmed the demand of ?1,39,515 along with interest and penalty. The Commissioner upheld this decision, leading to the appellant filing the present appeal.

4. Appellant's Arguments: The appellant argued that legal services and elevator maintenance were integral to their business activities, falling within the definition of input services as per Rule 2(l) of the CENVAT Credit Rules 2004. They cited a Bombay High Court decision in support.

5. Revenue's Stand: The Revenue, through the A.R., supported the findings of the impugned order, maintaining that the services in question did not qualify as input services.

6. Judgment: After considering submissions and cited judgments, the Judicial Member found that legal services and elevator maintenance were indeed integral to the business activities of the appellant. Citing the broad definition of input services by the Bombay High Court, the appeal was allowed, setting aside the impugned order with any consequential relief.

7. Conclusion: The judgment, delivered on 23/09/2016, favored the appellant, allowing the appeal against the disallowance of CENVAT credit for legal services and elevator maintenance, emphasizing the integral connection of these services with the business activities.