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2017 (6) TMI 844 - AT - Central Excise100% EOU - CENVAT credit - input services - catering services - outward freight services - event management services - house keeping services - cab hiring services - consultancy on construction service - denial on account of nexus - Held that - the credit availed on out-door catering prior to 1.4.2011 is allowed as input service and appellant has not claimed any CENVAT Credit after 1.4.2011 in the present case - credit allowed. Outward freight - Held that - the appellant has claimed credit till 31.3.2011 and also after 1.4.2011 but has not produced sufficient proof by way of documents and with regard to this input service, the matter will be examined by the original authority - matter on remand. Event management relating to annual day - house keeping services - Held that - the credit availed till 31.3.2011 is permissible - Similarly the input service relating to house keeping is allowed till 31.3.2011 and also after 1.4.2011 - credit allowed. Input service of cab hiring as well as consultancy service relating to construction - Held that - the credit availed is after 1.4.2011 which is not permissible as per the amended definition of input service defined in Rule 2(l). After the amendment, in the input service definition, these two input services have been specifically excluded. Therefore, the appellant is not entitled to CENVAT credit on these two services - credit denied. Appeal disposed off - part credit allowed, part credit denied and part matter on remand.
Issues:
Appeal against Commissioner (Appeals) order rejecting appellant's appeal on wrongly availed CENVAT credit service tax paid on certain services. Analysis: The case involves an appeal against the Commissioner (Appeals) order rejecting the appellant's appeal regarding wrongly availed CENVAT credit service tax paid on certain services. The appellant, a 100% EOU manufacturer of bulk drug/active pharmaceutical ingredients, availed credit on services like catering, outward freight, event management, housekeeping, cab hiring, and consultancy on construction. The original authority allowed credit for courier service but disallowed credits for other services, leading to a demand of ?20,00,315/- along with penalties and interest. The appellant contended that the disallowed services were essential for their manufacturing activities. The Commissioner (Appeals) upheld the original order, prompting the present appeal. The appellant argued that the impugned order failed to properly interpret the definition of input service pre and post 1.4.2011. They presented a table showing credit availed on different services till 31.3.2011 and after 1.4.2011. The appellant asserted that the disallowed services fell within the definition of input services and were crucial for their business. They cited legal precedents to support their argument, emphasizing that the basis for availing credit was whether the service was used directly or indirectly in manufacturing or business activities. The appellant highlighted decisions where catering, housekeeping, and annual day celebrations were deemed input services. The appellate authority considered both parties' submissions and records. They allowed credit for catering, event management related to the annual day, and housekeeping till 31.3.2011 and after 1.4.2011 based on legal precedents. However, credit for cab hiring and consultancy services post 1.4.2011 was rejected as these were specifically excluded from the amended definition of input services. The matter of outward freight credit was remanded to the original authority for further examination based on the documents provided by the appellant. Ultimately, the appeal was partly allowed, granting input credit for specific services while rejecting it for others and remanding one aspect for further review. In conclusion, the appellate tribunal's decision addressed the appellant's challenge against the rejection of their appeal on wrongly availed CENVAT credit. The judgment carefully analyzed the definition of input services pre and post 1.4.2011, considered legal precedents, and made a nuanced decision on the admissibility of credits for various services. The partial allowance of the appeal reflected a balanced approach, granting credit for services deemed essential while upholding the exclusion of services not meeting the revised input service definition.
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