2017 (5) TMI 95 - AT - Central Excise

CENVAT credit - eligible input service - office rental and the rental charges paid for car parking space - in or in relation to manufacture of goods - Held that - reliance was placed in the case of KPMG vs. CCE, New Delhi 2013 (4) TMI 493 - CESTAT NEW DELHI in which the Hon ble CESTAT, New Delhi has held that car parking facilities constitute input service and eligible to claim CENVAT credit relying upon the decision of Desert Inn Ltd. vs. CCE, Jaipur 2011 (3) TMI 640 - CESTAT, NEW DELHI - credit allowed - decided in favor of assessee.

Summary

Issues:
- Appeal against Orders-in-Original upholding denial of CENVAT credit for service tax paid on office rental and car parking charges.
- Interpretation of input service under Rule 2(l) of CENVAT Credit Rules, 2004.
- Precedent decisions on eligibility of car parking facilities and rental charges as input services.
- Applicability of input services directly or indirectly related to the manufacture of final goods.

Analysis:
The three appeals were filed against Orders-in-Original upholding the denial of CENVAT credit for service tax paid on office rental and car parking charges. The appellants, engaged in manufacturing Access Control Cards and Card Holders, availed CENVAT credit under CENVAT Credit Rules, 2004. The issue was whether the rental paid for immovable properties and car parking charges qualified as input services as defined under Rule 2(l) of CCR, 2004. The Assistant Commissioner confirmed the demand, which was later upheld by the Commissioner (A), leading to the appeals.

During the hearing, the appellant argued that the impugned order disregarded binding precedent decisions on the identical issue. It was contended that the definition of input service should be interpreted broadly to include any service used directly or indirectly in relation to the manufacture of final products. The appellant cited various authorities supporting their position, such as CCE vs. Ultratech Cement Ltd. and Coca Cola India Pvt. Ltd. Additionally, reference was made to the decision in KPMG vs. CCE, New Delhi, where car parking facilities were considered an input service eligible for CENVAT credit.

Further, the appellant referenced decisions like Bharat Fritz Werner Ltd. vs. CCE and Carrier Air-conditioning & Refrigeration Ltd. vs. CCE, where it was held that renting immovable property for setting up a marketing office fell within the definition of input service, allowing the assessee to claim CENVAT credit. Relying on these precedents, the Tribunal allowed the appeals, setting aside the impugned order and granting consequential relief to the assessee.

In conclusion, the Tribunal's decision was based on the broad interpretation of input services and the applicability of services directly or indirectly related to the manufacture of final goods. The appeals were allowed, emphasizing the eligibility of car parking facilities and rental charges as input services for claiming CENVAT credit.