2018 (2) TMI 540 - AT - Central Excise

Disallowance of cenvat credit - input services - appellant has not incorporated the premises in the registration certificate - premises was used for undertaking job work activity of the Appellant - Held that - As per definition of Inputs Service, the services used directly or indirectly in or in relation to manufacture of final products and clearance of final products upto place of removal including other services would fall into the category of Input Service in terms of Rule 2 (l) of Cenvat credit Rules, 2004. Hence there is no reason to disallow the cenvat credit. It has been held in number of judgments that the credit cannot be denied on the ground that the services were availed outside the registered premises. See Ultra Tech Cement Ltd. 2010 (9) TMI 126 - CESTAT, MUMBAI Appellant are eligible for credit of service tax charged to them on rented premises.

Summary

Issues involved:
Availment of Cenvat credit on service tax paid for rented premises; Denial of credit due to premises not being included in central excise registration.

Analysis:
The appellant availed Cenvat credit for service tax on renting immovable property used for manufacturing activities. The credit was denied as the rented premises were not included in the central excise registration. The Commissioner (Appeals) upheld the denial, leading to the appeal before the tribunal.

The Appellant argued that since the rented premises were used for manufacturing final products, the credit should be allowed. The revenue, represented by the Additional Commissioner, reiterated the denial based on the definition of "Input Service."

Upon review, the tribunal found that the premises were indeed used for the Appellant's manufacturing activities. According to the definition of "Input Service," services directly or indirectly related to manufacturing final products fall under this category. Therefore, the tribunal concluded that there was no justification to disallow the Cenvat credit. Citing various judgments, including Ultra Tech Cement Ltd. and Auto Print Machinery Manufacturers, it was established that credit cannot be denied solely based on services being availed outside registered premises.

Consequently, the tribunal ruled in favor of the Appellant, holding them eligible for the credit of service tax on the rented premises. The impugned order was set aside, and the appeals were allowed, granting consequential relief to the Appellant.