2016 (11) TMI 420 - AT - Central Excise

Whether the appellant is entitle for the Cenvat credit on the services namely maintenance of Xerox machine installed in the appellant s factory and Services of Cars? - Held that - reliance placed in the decision of the case of Commissioner of C. Ex. Nagpur Vs. Ultratech Cement Ltd 2010 (10) TMI 13 - BOMBAY HIGH COURT where it was held that activity related to business activities integrally connected with business of assessees therefore the credit on such activity which is in relation to business is input service. There is no dispute that photocopier and cars are used for the factories activity which is related to the business activity of the appellant. Hence the services received in respect of photocopier and cars falls within the category of activity in relation to the business - CENVAT credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Entitlement to Cenvat credit on services - maintenance of Xerox machine and services of cars.

Analysis:
The appeal in this case challenged the Order-in-Appeal passed by the Commissioner(Appeals) Central Excise, Mumbai Zone I, which favored the Revenue. The primary issue revolved around the entitlement of the appellant to claim Cenvat credit on services, specifically the maintenance of a Xerox machine and services related to cars used by the factory.

Maintenance of Xerox Machine:
The appellant argued that the Xerox machine installed in the factory was used exclusively for making photocopies for the factory's work, thus falling under the inclusion clause of the definition of input service. Citing a judgment from the Hon'ble Bombay High Court, the appellant contended that activities related to business constitute input services as per the Cenvat Credit Rules, 2004. The Tribunal acknowledged that the photocopier was indeed utilized for office work within the factory, leading to the allowance of Cenvat credit by the Original authority. The Tribunal found no evidence to deny the credit and referred to the precedent set by the Hon'ble Bombay High Court to support the appellant's claim.

Services of Cars:
Regarding the services related to the two cars registered under the appellant company's name and used for transporting factory staff, the appellant argued that the maintenance of these cars constituted an input service as they were exclusively utilized for the business activities of the company. The Tribunal agreed with the appellant's stance, emphasizing that the cars were integral to the factory's operations and business activities. Drawing parallels to the judgment in the Ultratech Cement Ltd. case, the Tribunal concluded that services received for the photocopier and cars were directly linked to the appellant's business activities, thus falling within the definition of activities related to the business. Consequently, the Tribunal overturned the impugned order and allowed the appeal in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, granting entitlement to Cenvat credit on the maintenance services of the Xerox machine and cars used for factory operations. The decision was based on the integral connection of these services to the business activities of the appellant, as established by the usage and registration of the Xerox machine and cars within the factory premises.