2017 (6) TMI 890 - AT - Central Excise

CENVAT credit - various input services - denial on account of nexus - Held that - all the services fall in the definition of input service as provided in Rule 2(l) - part of credit to the tune of ₹ 5,539/- denied on the ground that appellant could not produce any document justifying the CENVAT credit - except this part, entire amount of credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Eligibility of various input services for CENVAT credit under Rule 2(l) of the CENVAT Credit Rules, 2004.
2. Validity of availing CENVAT credit based on debit notes.
3. Denial of CENVAT credit due to lack of documentary evidence.

Issue-wise Detailed Analysis:

1. Eligibility of Various Input Services for CENVAT Credit:
The appellant, engaged in manufacturing chemical products, availed CENVAT credit on various services such as courier charges, travelling expenses, telephone charges, cab hire charges, Xerox charges, vehicle hire charges, bank charges, travel agent, and cost audit charges. The Department contested that these services did not qualify as 'input services' under Rule 2(l) of the CENVAT Credit Rules, 2004, as they were not used directly or indirectly in the manufacture of final products or business activities. The original authority disallowed credit on several services, including bank charges, internet and broadband charges, mobile telephone charges, consultancy charges, AMC on industrial fire and safety equipment, and others. The Commissioner (A) partially allowed and partially disallowed the credit. The Tribunal, after considering various judicial precedents, held that all these services fall within the definition of 'input service' as provided in Rule 2(l) and are eligible for CENVAT credit.

2. Validity of Availing CENVAT Credit Based on Debit Notes:
The appellant availed CENVAT credit based on debit notes issued by M/s. DIC India Ltd. for services related to central purchase function, promotion/marketing of products, and other business activities. The Department disallowed this credit, arguing that debit notes are not valid documents under Rule 4A of the Service Tax Rules. The Tribunal, relying on decisions such as M/s. SRF Ltd. vs. CCE and Shivam Exports vs. CCE, held that debit notes containing all necessary details as required under Rule 4A are valid documents for availing CENVAT credit.

3. Denial of CENVAT Credit Due to Lack of Documentary Evidence:
The original authority and the Commissioner (A) denied CENVAT credit of ?5,539/- due to the appellant's failure to produce documentary evidence. The appellant conceded this point during the hearing. The Tribunal upheld the denial of this specific credit amount due to the lack of documentation.

Conclusion:
The Tribunal allowed the appellant's claim for CENVAT credit on all contested services, except for the amount of ?5,539/- which lacked documentary proof. The impugned order was set aside, affirming that the services in question qualify as 'input services' under Rule 2(l) of the CENVAT Credit Rules, 2004, and that debit notes with requisite details are valid for credit claims. The operative portion of the order was pronounced in open court on 29/12/2016.