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2017 (11) TMI 483 - HC - Service TaxCENVAT credit - input services - GTA Services - auction services - outdoor catering services - insurance services - rent-a-cab services - Clearing and forwarding agency service - scope of the term up to the place of removal - Held that - the Tribunal has recorded a finding that from the verification of bills, it is found that transport charges are required to be borne out by the assessee. Therefore, that issue is also required to be decided in favor of assessee. Cargo Handling Services - Insurance Services - Held that - reliance placed in the decision of Gujarat High Court in Commissioner of Central Excise and Customs vs. Ultratech Cement Ltd. 2014 (9) TMI 187 - GUJARAT HIGH COURT and it is held that the issue is answered in favor of assessee. Rent a Cab Service - Held that - reliance placed in the decision in the case of The Commissioner of Central Excise Service Tax Bengaluru-IV, Versus Ultra Tech Cement Ltd. 2016 (7) TMI 1080 - KARNATAKA HIGH COURT , where it was held that credit is allowed - the issue is required to be answered in favour of assessee. Club and association services - Held that - it is clear that it is club activities for going for a sale or any other assigned work. It will be operational, manufacturing activity. Place of removal - Whether rule 4 (c) will come into operation or not? - Held that - In view of Section 2(t), it is very clear that the meaning does not define under the Cenvat Credit Rules, 2004 then the meaning is to be derived from the provisions of the Act - Mr. Ranka contended that 3(2) prohibits it only for the purpose of defence services under 4(c) since no other place, the word removal has been defined. In that view of the matter to come out to a conclusion for removal of the goods, the meaning which has been defined under 4(c) is required to take into account - the matter is answered in favor of assessee. Appeal dismissed - decided against Revenue.
Issues Involved:
1. Eligibility of CENVAT credit for various services, including GTA (outward transportation), auction services, outdoor catering, insurance services, rent-a-cab services, and club or association services as "Input Services" under the CENVAT Credit Rules, 2004. Issue-wise Detailed Analysis: 1. GTA (Outward Transportation): The Tribunal allowed CENVAT credit for GTA services, including outward transportation from the factory to the buyer's premises, based on the interpretation that these services are integral to the business of manufacturing and delivering final products. The Tribunal’s decision was supported by multiple High Court judgments, including ABB Ltd. (Karnataka High Court), Ambuja Cements Ltd. (Punjab & Haryana High Court), and Philips Carbon Black Ltd. (Gujarat High Court). These rulings emphasized that transportation charges incurred up to the place of removal are eligible for credit, provided the sale occurs at the destination point and the freight charges are part of the price of goods. 2. Outdoor Catering Services: The Tribunal allowed credit for outdoor catering services used in factory canteens, citing the necessity of providing such services under the Factories Act, 1948. The Bombay High Court in Ultratech Cement Ltd. and the Karnataka High Court in Stanzen Toyotetsu India Pvt. Ltd. recognized that providing canteen services is mandatory and integrally connected with the business of manufacturing. The Tribunal distinguished this from cases where outdoor catering services are used for guest houses, which do not qualify for credit. 3. Insurance Services: The Tribunal allowed credit for insurance services related to the business, such as insurance for plant erection, company vehicles, and protection from fire. The Karnataka High Court in Stanzen Toyotetsu India Pvt. Ltd. held that insurance services, including group accidental policies and fidelity insurance for workers, are integral to business operations and thus qualify for credit. 4. Rent-a-Cab Services: The Tribunal allowed credit for rent-a-cab services, recognizing them as essential for ensuring timely attendance of employees, which impacts the manufacturing process. The Karnataka High Court in Stanzen Toyotetsu India Pvt. Ltd. supported this view, stating that such services are directly related to business operations. 5. Auction Services: The Tribunal allowed credit for auction services used for selling waste and scrap arising during manufacturing, considering it part of the business of manufacturing. This was supported by the Tribunal’s interpretation that such services are integrally connected with the business activities of the assessee. 6. Club or Association Services: The Tribunal allowed credit for club or association services used by officials for business-related travel and activities, recognizing them as part of business operations. This interpretation aligns with the inclusive definition of "input service" under the CENVAT Credit Rules, which covers services used in relation to business activities. Conclusion: The Tribunal's decision to allow CENVAT credit for various services was based on a broad interpretation of "input service" under the CENVAT Credit Rules, supported by multiple High Court judgments. The Tribunal emphasized that services integrally connected with the business of manufacturing and delivering final products qualify for credit. The appeals by the Department were dismissed, and the issues were resolved in favor of the assessee.
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