2018 (2) TMI 808 - AT - Central Excise

CENVAT credit - Department was of the view that the credit on various services is not eligible as the services were rendered at various other places for which the corporate office had made payments - Held that - When the corporate office of he appellant has taken input service distributor registration, the distribution of credit on ISD invoices is in accordance with law. Intention of having ISD registration is for distribution of credit when there are more than one unit. All the activities relating to the business of the assessees would qualify as input services - The services involves would sufficiently qualify as activities relating to the business of the manufacturer. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility of input services credit availed by the appellants.
2. Nexus of the input services with the manufacturing activities.
3. Interpretation of the definition of input services under Rule 2(l) of CCR.
4. Compliance with ISD registration for credit distribution.
5. Application of precedent judgments on input services eligibility.

Analysis:
1. The appellants, engaged in manufacturing Stainless Steel and Aluminium Pressure Cookers, availed credit on input services based on invoices from their corporate office. The department contended that services not consumed at the manufacturing unit lacked nexus with manufacturing activities, proposing denial of credit, interest, and penalties. The original authority upheld this decision, leading to the appeal.

2. The appellants argued that credit availed on ISD invoices distributed by their corporate office should be allowed, citing a Tribunal decision in their favor. The definition of input services pre-01.04.2011, encompassing activities relating to business, supported their claim. Precedents like CCE Nagpur Vs. Ultratech Cement Ltd. and Coca Cola India Pvt. Ltd. emphasized the broad interpretation of input services.

3. The department, represented by the LD. AR, maintained the denial of credit, asserting the lack of nexus between distributed services and manufacturing activities. The services, distributed through ISD invoices, were deemed irrelevant to manufacturing by the lower authority.

4. The period of dispute, detailed in the SCN, highlighted the amounts involved from August 2005 to March 2010. The denial of credit based on ISD invoices distribution was a key ground, challenged by the appellants. The ISD registration aimed at lawful credit distribution among multiple units, supporting the appellants' position.

5. Upon review, the Tribunal found the denial of credit unjustified, setting aside the impugned order and allowing the appeal with consequential relief. Referencing the judgments of Ultratech Cement Ltd. and Coca Cola India Pvt. Ltd., the Tribunal emphasized that the services in question qualified as activities relating to the business of the manufacturer, supporting the appellants' entitlement to credit on input services.