2016 (12) TMI 1174 - AT - Central Excise

CENVAT credit - rent-a-cab service - customs house agent service - courier service - appellant is a manufacturer who has utilised the three services on which tax under Finance Act, 1994 was also properly discharged. It is also admitted that the expression in or in relation to manufacture is not susceptible to precise delineation - Held that - reliance placed on the decision of the case of Commissioner of Central Excise, Bangalore - 111 v. Stanzen Toyotetsu India (P) Ltd 2011 (4) TMI 201 - KARNATAKA HIGH COURT , where it was held that under the scheme of the Cenvat Credit Rules, 2004, the service tax paid on all those services which the assessee has utilized directly or indirectly in or in relation to the final product is entitled to claim the credit - eligible service for availment of input credit - appeal allowed - decided in favor of appellant.

Summary

Issues:
Eligibility of CENVAT credit for taxes paid on 'rent-a-cab service', 'customs house agent service', and 'courier service' from April 2006 to March 2009.

Analysis:
The appeal by M/s Mahalaxmi Seamless Ltd challenged the order-in-appeal by the Commissioner of Central Excise (Appeals), Mumbai-II regarding the eligibility of CENVAT credit for taxes paid on specific services utilized during a certain period. The appellant, a manufacturer of pipes, sought credit for 'customs house agents service', 'courier service', and 'rent-a-cab service', which the original authority deemed ineligible. The first appellate authority also ruled against the appellant, citing the need for a demonstration that these services were utilized in or in relation to manufacturing activities. The decision of the Tribunal in a similar case was referenced to support the recovery ordered by the lower authority.

It was acknowledged that the appellant utilized the services in question, and the tax under the Finance Act, 1994, was duly discharged. However, the interpretation of the expression 'in or in relation to manufacture' was deemed not precisely defined. The appellant argued that the nexus with manufacturing activities is crucial for availing CENVAT credit, citing a relevant decision of the Hon'ble High Court of Bombay.

The appellant's consultant referenced subsequent decisions by the Tribunal and the Hon'ble High Court of Karnataka to support the claim that the services in question constitute input services eligible for CENVAT credit. The consultant highlighted that the Cenvat Credit Rules, 2004, allow manufacturers of final products to claim credit for service tax paid on any input service utilized directly or indirectly in or in relation to the final product. The consultant emphasized that the judgments cited validate the eligibility of the services for input credit.

Based on the arguments presented and the legal precedents cited, the Tribunal allowed the appeal by M/s Mahalaxmi Seamless Ltd and set aside the impugned order, ruling in favor of the appellant. The decision emphasized the eligibility of the disputed services for availing input credit under the Cenvat Credit Rules, 2004.