2017 (6) TMI 1100 - AT - Central Excise

CENVAT credit - input services - Canteen Service - Repair and Maintenance Service - Commissions - Labour charge-job work, etc. - Management Consultancy services - Rule 2(i) of CENVAT Credit Rules, 2004 - Held that - appellant is entitled to CENVAT credit on canteen service, repair and maintenance, labour charges job worker, clearing and forwarding agency service, commercial coaching and training service as they are directly related to the business of the appellant - credit allowed. Management Consultancy services - Held that - appellant has not produced the documents like Management Service Agreement as well as invoices and TR-6 challans showing the payment made towards Management Consultancy Fee before the lower authorities - case is to be remanded back to the original authority to examine the documents - matter on remand. Part matter allowed and part Appeal allowed by way of remand.

Summary

Issues: Appeal against Commissioner's order modifying CENVAT credit availed on various services, demand of interest, and penalty under CCR, 2004.

Analysis:
1. The appellants challenged the Commissioner's order modifying CENVAT credit availed on services like rent a cab, commission paid, professional fee, courier agency service, and denying credit on services like canteen service, repair and maintenance, labour charges - job worker, clearing and forwarding agency service, commercial coaching and training service, management consultancy fees. The Commissioner confirmed demand of interest and penalty under CCR, 2004.

2. The appellants are engaged in manufacturing pumps falling under specific chapters of Central Excise Tariff Act, 1985. The original authority demanded irregular CENVAT credit, interest, and imposed a penalty for wrongly availing credit on ineligible input services. The appellant filed an appeal before the Commissioner (A) against the denial of CENVAT credit on certain input services.

3. The arguments presented by the appellant's CA contended that the impugned order did not consider the evidence on record properly and failed to analyze the scope of input services as per CCR, 2004. The CA highlighted that all denied services were used in or in relation to the manufacture of the final product, citing relevant case law to support the claim that credit should have been allowed for all services used in the business of manufacture.

4. The AR supported the findings of the impugned order and specifically addressed the issue of Management Consultancy Fee, stating that the appellant failed to provide necessary documents to prove the service's relation to the manufacture of the final product.

5. After reviewing submissions and case law, the Judicial Member concluded that the appellant is entitled to CENVAT credit on services like canteen service, repair and maintenance, labour charges job worker, clearing and forwarding agency service, commercial coaching and training service as they are directly related to the business. However, regarding Management Consultancy Fee, the lack of supporting documents led to a remand back to the original authority for further examination.

6. The final decision allowed the appeal by setting aside the impugned order and remanding the case back to the original authority for reevaluation based on the additional documents regarding Management Consultancy services. The appeal was allowed by way of remand, emphasizing the need for a reasoned order based on the provided documentation.