2017 (6) TMI 151 - AT - Central Excise

CENVAT credit - input services - Air Travel Agent Service - Tour Operator Service - Cable Operator Service - Membership of Club or Association Service - manufacture of Machine Rolled Cigarettes and Cut Tobacco - Held that - the impugned order denying the cenvat credit on Air Travel, Tour Operator, Club Membership fee and Cable Operator is wrong and not sustainable and therefore the impugned order set aside - appeal dismissed - decided against Revenue.

Summary

Issues:
- Eligibility of cenvat credit on various input services
- Appeal filed by Department against allowed services
- Appeal filed by assessee against denied services

Analysis:
- The judgment involves two appeals, one by the assessee and the other by the Department, challenging the order passed by the Commissioner (Appeals) regarding the eligibility of cenvat credit on specific input services. The Commissioner partly allowed the assessee's appeal, permitting credit for certain services and disallowing it for others.
- The appellants, engaged in manufacturing cigarettes and tobacco, availed cenvat credit on input services distributed by their Head Office and India Leaf Tobacco Division. The Department alleged wrongful availing of credit on certain services, leading to a show-cause notice and subsequent confirmation of demand, interest, and penalty by the adjudicating authority.
- The Commissioner's order partially allowed the appellant's appeal, prompting both parties to file appeals. The Department contested services allowed by the Commissioner, while the appellant challenged services denied cenvat credit.
- The appellant argued that services like Air Travel, Tour Operator, Club Membership, and Cable Operator are integral to their business, citing various tribunal and court decisions supporting the classification of these services as 'input services.' Relying on precedent cases, the appellant contended that the impugned order denying cenvat credit on these services was incorrect and illegal.
- The Revenue appealed against Construction Service, Interior Decorator, and Outdoor Caterer services, claiming no nexus to the manufacturing activity in Bangalore. However, the Commissioner (Appeals) allowed cenvat credit on these services, citing relevant decisions. Following the precedent set by these decisions, the judge concluded that the denial of cenvat credit on certain services was incorrect and unsustainable, setting aside the impugned order in that regard. The Revenue's appeal was dismissed, while the appellant's appeal was allowed.

This detailed analysis covers the issues involved in the judgment, providing a comprehensive overview of the case and the decisions made by the tribunal.