2017 (10) TMI 199 - AT - Central Excise

CENVAT credit - input services - denial on the ground that the services were provided outside the registered premises of the appellant - Held that - The definition of input service contained in Rule 2 (l) of the CCR, 2004 provides that the activities relating to business should also be considered as input service for availment of Cenvat benefit. It is not the case of Revenue that the disputed services were not used by the appellant for accomplishing its business purpose - In this case, since the appellant had received the services for its business purpose and paid the service tax in respect of the taxable service received by it, it cannot be said that the benefit of Cenvat Credit shall not be extendable to the appellant on the sole ground that the services were not received within its factory premises - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of Cenvat benefit for input services due to location of service provision

Analysis:
The case revolved around the denial of Cenvat benefit for input services based on the location of service provision. The Department contended that the services were provided outside the registered premises of the appellant, leading to the denial of Service Tax credit. The appellant argued that the input services were used for business activities, and regardless of the service location, since service tax was paid, Cenvat Credit should be available. The appellant relied on a previous Tribunal decision supporting their stance.

The Tribunal analyzed the definition of input service as per Rule 2(l) of the Cenvat Credit Rules, 2004, which includes activities related to business as eligible for Cenvat benefit. The Revenue did not dispute that the disputed services were used for the appellant's business purposes. Rule 3 specifies that the manufacturer should receive the service, without mandating receipt only at the factory premises. Since the appellant received the services for business purposes and paid the service tax, the Tribunal held that denying Cenvat Credit based on service location was unjustified. Additionally, the Tribunal noted a previous order in favor of the appellant in a similar context, further supporting the extension of Cenvat benefit.

In conclusion, the Tribunal found no merit in the impugned order and allowed the appeal in favor of the appellant. The decision highlighted the importance of the purpose of service usage for business activities over the specific location of service provision, emphasizing the eligibility of Cenvat Credit when services are utilized for business purposes and service tax is duly paid.