2008 (9) TMI 337 - AT - Service Tax

Cenvat Credit Input Service relation to manufacturing activity - services of (i) Security at the Depot; (ii) Pest Busters - After detailed analysis, the Commissioner (Appeals) has found that both the activities are related to the manufacturing activity. He has noted that the availment of Cenvat credit on services of Pest Busters activity of catching birds relates to manufacturing activity, which is food products for human consumption and such an activity is to prevent contamination of food products. Likewise, he has found that the Security Services were also related to the final products to prevent them from theft/pilferage of the goods, which is contested by the Revenue and the Revenue seeks for stay of the operation. tribunal refused to grant stay matter to be heard by single member bench

Summary

Issues: Availability of credit on service tax paid by the appellants on the services of Security at the Depot and Pest Busters under the definition of Input Services in Cenvat Credit Rules.

In the judgment by the Appellate Tribunal CESTAT, Bangalore, the Revenue appealed Orders-in-Appeal regarding the availability of credit on service tax paid by the appellants for Security at the Depot and Pest Busters services. The Commissioner (Appeals) found both activities related to manufacturing, with Pest Busters preventing contamination of food products and Security Services preventing theft of goods. The Revenue sought a stay of the operation. The Tribunal noted the Commissioner (Appeals) followed a previous ruling in a similar case and found no issue with the impugned orders, rejecting the stay applications. The matters were scheduled for a hearing before a Single Member bench on 8th October, 2008. The judgment emphasized the importance of preventing contamination and theft in manufacturing activities to justify the availment of Cenvat credit on the mentioned services. The legal analysis highlighted the relevance of past rulings and citations in supporting the decision to reject the stay applications. The judgment showcased the application of legal principles and precedents in determining the availability of credit under the Cenvat Credit Rules for specific services utilized in manufacturing processes.