2017 (8) TMI 1043 - AT - Central Excise

CENVAT credit - various input services - denial on the ground of nexus - The contention of Revenue is that the appellants could not established that the said services were used in or in relation to the manufacture of final product and therefore, denied Cenvat credit of service tax paid on the said services - Held that - Hon ble High Court of Bombay in the case of Commissioner of Central Excise Nagpur vs. Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT , has held that very clearly held that all services used in relation to the business of manufacturing of final products are covered under the definition of input services - the services are eligible for CENVAT credit - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Admissibility of Cenvat credit on various input services for the period from April 2007 to July 2008.
2. Disallowance of Cenvat credit by the original authority.
3. Appeal against the Order-in-Original and Order-in-Appeal.

Analysis:
1. The appeal was directed against Order-in-appeal No. 264/CE/APPL/NOIDA/2011 passed by the Commissioner of Customs & Central Excise (Appeals) Noida. The appellants, manufacturers of Polyester Film and BOPP articles of plastics, were issued a show cause notice to recover Cenvat credit of ?34,56,515/- availed on service tax paid on various services. The original authority allowed credit on some services but disallowed on others. The Commissioner (Appeals) upheld the disallowance of credit on certain services, leading to the appeal before the Tribunal.

2. The appellant contended that all services for which service tax was paid were used for business purposes, citing a ruling of the Hon'ble High Court of Bombay. The Revenue argued that the services were not used in or in relation to the manufacture of the final product, justifying the denial of Cenvat credit. The Tribunal referred to the High Court's ruling that all services used in relation to the business of manufacturing final products are covered under the definition of input services. Based on this, the Tribunal held that the service tax paid on the disputed services was admissible for Cenvat credit.

3. The Tribunal, after considering the rival contentions and the High Court's precedent, concluded that the disputed services were eligible as input services for Cenvat credit. The ruling emphasized that all services used in relation to the business of manufacturing final products fall under the definition of input services. Consequently, the Tribunal allowed the appeal, modifying the Order-in-Appeal and granting the appellant consequential relief as per the law. The judgment was dictated and pronounced in court, favoring the appellant's position.