2017 (9) TMI 555 - AT - Service Tax

CENVAT credit - various input services - Held that - reliance placed in the decision in the case of CCE, Nagpur Versus Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT , where it was held that all the services used in relation to the business of manufacturing the final products are covered under the definition of input service - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Dispute over Cenvat credit eligibility for service tax paid on various services used in relation to the manufacture of final products.
2. Interpretation of the definition of "input service" in relation to the business of manufacturing final products.
3. Appeal against the Order-in-Appeal issued by the Commissioner (Appeals) Customs, Central Excise & Service Tax, Noida.

Issue 1: Dispute over Cenvat Credit Eligibility:
The case involved a dispute regarding the eligibility of Cenvat credit for service tax paid by M/s Uflex Ltd. on various services used in the manufacturing process of final products. The Revenue contended that the services were not directly related to the manufacture of final products, leading to a denial of Cenvat credit for a significant amount. The original authority partially allowed the credit, leading to appeals by both M/s Uflex Ltd. and the Revenue.

Issue 2: Interpretation of "Input Service" Definition:
The argument revolved around the interpretation of the definition of "input service" in the context of services used in the business of manufacturing final products. The Counsel for M/s Uflex Ltd. cited a ruling by the Hon'ble High Court of Bombay in a similar case, emphasizing that all services used in relation to the business of manufacturing final products fall under the definition of "input service." This interpretation was crucial in determining the admissibility of Cenvat credit for the disputed services.

Issue 3: Appeal Against Order-in-Appeal:
The appeals were directed against the Order-in-Appeal issued by the Commissioner (Appeals) Customs, Central Excise & Service Tax, Noida. The Commissioner allowed Cenvat credit for certain services while disallowing it for others, leading to cross-appeals by M/s Uflex Ltd. and the Revenue. The final decision hinged on whether the disputed services were integral to the manufacturing process of final products.

The dispute centered on the eligibility of Cenvat credit for service tax paid by M/s Uflex Ltd. on various services used in manufacturing final products. The Revenue argued that these services were not directly related to the manufacturing process, leading to a denial of credit. The original authority partially allowed the credit, prompting appeals from both parties. The Counsel for M/s Uflex Ltd. referenced a Bombay High Court ruling to support the claim that all services used in relation to manufacturing final products qualify as "input services," a pivotal argument in determining credit admissibility.

The interpretation of the "input service" definition was crucial in this case, with the Counsel relying on legal precedent to establish that services connected to the business of manufacturing final products fall within this definition. The Hon'ble High Court of Bombay's ruling emphasized the broad scope of services covered under "input services," including those integral to business operations beyond the manufacturing process. This interpretation influenced the decision regarding the disputed Cenvat credit for services utilized by M/s Uflex Ltd.

The appeals were lodged against the Order-in-Appeal issued by the Commissioner, who allowed credit for certain services while denying it for others. M/s Uflex Ltd. appealed the denial of credit for specific services, while the Revenue challenged the approval granted by the Commissioner. The final judgment favored M/s Uflex Ltd., aligning with the Bombay High Court's interpretation that all services linked to manufacturing final products are considered "input services." Consequently, M/s Uflex Ltd. was entitled to the disputed Cenvat credit, emphasizing the importance of legal interpretations in tax credit disputes.