2017 (6) TMI 157 - AT - Central Excise

CENVAT credit - various input services - Rule 2(l) of CCR, 2004 - structural activity for RBAU line media - Held that - this service is not eligible input service - credit disallowed. Ticket charges - visa expenses - Held that - this service fall in the definition of eligible input service and the appellants are entitled to the CENVAT credit of the same - reliance placed in the case of IVY Comptech Pvt. Ltd. vs. CCE, Hyderabad-II 2015 (9) TMI 1090 - CESTAT BANGALORE . Cable specification preparation - Held that - credit denied on the ground of lack of nexus between the said service and the output activity - denial upheld. Event management service - Held that - events are undertaken for advertisement and promotion of the product of the company and therefore it is in relation to the business of the company - event management is covered as an input service - credit allowed. Group mediclaim insurance policy - Held that - as the same is a requirement under Section 38 of the Employees State Insurance Act, 1948 which mandates that, all the employees in the factory shall be insured and the policy is taken on the life of the employees only and therefore, it is covered as an input service - credit allowed. The demand of interest and imposition of penalty is not justified as the appellant has availed the credit but did not utilize the same and they were having sufficient balance in their CENVAT account during the relevant period. Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
- Disallowance of CENVAT Credit on various input services

Analysis:
The appellant filed two appeals challenging the common order passed by the Commissioner (A) disallowing CENVAT Credit on certain input services while allowing it on others. The issue revolved around the eligibility of the input services for claiming CENVAT Credit. The Tribunal noted that both appeals shared common issues and thus decided to dispose of them through a single order.

The Tribunal examined each input service individually based on the submissions made by the appellant's consultant. The first service in question was the structural activity for RBAU line media. The consultant argued that this service falls under modernization work and not new construction, making it eligible for credit. However, the Tribunal agreed with the Commissioner (A) that this service did not qualify as an eligible input service and disallowed the credit.

Regarding air ticket charges and visa expenses, the consultant contended that these expenses were directly related to manufacturing and training activities, citing relevant precedents. The Tribunal concurred with the consultant's argument, holding that these services indeed fell within the definition of eligible input services, allowing the credit.

For cable specification preparation, the Tribunal upheld the Commissioner (A)'s decision to deny the credit due to a lack of nexus with the output activity, despite the consultant's arguments. However, in the case of event management and group mediclaim insurance policy, the Tribunal sided with the appellant, considering them as eligible input services based on relevant legal precedents.

Other services like pick-up and drop of employees, MAZE, B V E Racks relocation, technical support, etc., were deemed eligible for credit as they were related to the business activities of the company. The Tribunal also addressed the issue of interest and penalty, ruling in favor of the appellant based on the availability of sufficient balance in their CENVAT account during the relevant period.

In conclusion, the Tribunal partially allowed the appeals, disallowing credit for certain services while permitting it for others based on the eligibility criteria established through legal interpretations and precedents. The decision was pronounced in open court on 25/05/2017.