2017 (11) TMI 154 - AT - Central Excise

CENVAT credit - input services - Air Travel Agency Services - Consulting Engineering Services - General Insurance Service - Management Consultant Services - C&F Services - Man Power Service - Maintenance or Repair Services - denial on the ground that they have no nexus with the manufacture of finished products - Held that - with regard to General Insurance Service, the authorities below have noted that appellant has not adduced any document to establish that the services were availed for insuring the Plant and Machinery - issue with regard to eligibility of credit on General Insurance services require to be remanded to the adjudicating authority for reconsideration of the issue - matter on remand. Manpower service - Held that - Outdoor Catering Services as well as Man Power Recruitment Agency Service fall under two different categories. The services availed is Man Power Recruitment Agency Service and such recruitment of man power may be used in different areas of production/work in the factory. The use of man power in the canteen cannot be considered as an activity of out outdoor catering services - Further it is also seen that no such allegation has been raised in the SCN - the admissibility of the credit on the disputed services have been analyzed and held in favor of the assessee. Appeal allowed in part and part matter on remand.

Summary

Issues:
1. Availment of service tax credit on various services for manufacturing finished products.
2. Disallowance of credit on specific services like General Insurance, Man Power Recruitment Agency services, and Outdoor Catering Services.

Analysis:
1. The appellant, a manufacturer of "PPC Cement," availed service tax credit on ISD invoices for services like Air Travel Agency, Consulting Engineering, General Insurance, Management Consultant, C&F, Man Power, and Maintenance or Repair Services. The authorities alleged no nexus with the manufacturing of finished products. The original authority and Commissioner (Appeals) confirmed the demand and penalties. The appellant argued that the services were used in manufacturing, including repairs, recruitment, and insurance. The Tribunal previously allowed credit on similar services in the appellant's case (Final Orders No. 40298-40299/2017 and No. 41923/2016).

2. The Revenue contended that post-1.4.2011, the exclusion part of the definition bars credit for General Insurance services. They claimed lack of evidence that insurance was for Plant and Machinery. They also disputed the eligibility of Man Power Recruitment Agency services for canteen and gardening, citing exclusion for Outdoor Catering Services. The Tribunal found no merit in these arguments, noting that the services were distinct and used in various production areas. The issue of General Insurance services' eligibility was remanded for further consideration.

3. Regarding other services like Air Travel Agency, C&F Agency, Consulting Engineering, Management Consultant, Maintenance or Repair, Man Power, Security Agency, and Training Services, the Tribunal disagreed with disallowing credit for Man Power services in the canteen. It differentiated between Man Power Recruitment and Outdoor Catering Services, finding no basis for disallowance. The Tribunal referenced previous favorable decisions for the appellant and allowed the appeal partly, remanding the issue to the adjudicating authority.