9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 769 - AT - Central ExciseCENVAT Credit - various input services - Management Consultancy Services - Business Exhibition service - Management consultancy and Tax consultancy Service - Insurance for finished goods and Inputs - Insurance of employees family members - Lease for cars - Architecture and Construction services - Training service - Pandal and Shamiana service. Management Consultancy Services - various services under this head - Held that - On going through the nature of services availed by the assessee such as advertisement services, market research, coaching and training, finance and legal services, procurement of inputs etc., these services found to be an inclusive part of the definition of input service, after amendment as on 01.04.2011 - as regards Consulting Service, these services are input services under activities relating to business, finance, audit, accounts and quality control, Cenvat credit on the aforesaid services cannot be denied - credit allowed. Business Exhibition service - Held that - Prior to March 2011, the assessee is entitled to avail Cenvat credit on input services which have been availed by them in the course of their business of manufacturing excisable goods as per the decision of Hon ble Bombay High Court in the case of CCE, Nagpur vs. Ultra Tech Cement Limited 2010 (10) TMI 13 - BOMBAY HIGH COURT - the assessee is entitled to avail Cenvat credit of ₹ 7,19,438/-. Management consultancy and Tax consultancy - Held that - The said services availed by the assessee are legal in nature and the same form inclusive part of definition of input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004 - Credit allowed. Insurance for finished goods and Inputs - Held that - Assessee has opted insurance for their finished goods and inputs. Until and unless the goods are insured, in the event of any unforeseen accident wherein the finished goods or inputs destroyed before clearance from the place of removal, the said activity is attributable to the manufacturing activity of the assessee - credit allowed. Insurance of employees family members - extended period of limitation invoked for denial of credit - Held that - Extended period of limitation is not invokable for denial of Cenvat credit on insurance of family members of the employees - As there is no quantification of the said amount before us, therefore, for the said limited purpose of quantification of the amount of disallowance of Cenvat credit on Insurance of family members of the employees of the assessee, the matter need re-examination at the end of the adjudicating authority - matter on remand. Lease for cars - Held that - The car has been taken by the assessee for official purposes to be used by the employees of the assessee. As the said activity relates to business of manufacturing, therefore, the assessee is entitled to avail Cenvat credit - credit allowed. Architecture and Construction services - Held that - With regard to architecture and construction services availed by the assessee for setting up of factory, we find that the said issue has been settled by the decision of the Hon ble Punjab and Haryana High Court in the case of Bellsonica Auto Components India Pvt. Limited 2015 (7) TMI 930 - PUNJAB & HARYANA HIGH COURT , where it was held that the input services used in relation to setting up, modernization, renovation or repairs of a factory will be allowed as credit, even if they are assumed as not an activity relating to business as long as they are associated directly or indirectly in relation to manufacture of final products and transportation of final products upto the place of removal - credit allowed. Training service - the adjudicating authority, on merits has not disputed that assessee is not entitled to avail Cenvat credit but technically it has been held that there is no service tax component shown in the invoices and the assessee has not paid the service tax, consequently they are not entitled to avail Cenvat credit - Held that - As it is evident from the invoice that assessee has paid the service tax, therefore, we hold that assessee is entitled to avail Cenvat credit on training service to the tune of ₹ 19,158/- - credit allowed. Pandal and Shamiana service - denial on account of nexus - Held that - The said service has been availed by the assessee for organising Diwali function in the factory for the employee and in terms of decision of the Hon ble High Court of Karnataka in the case of Toyota Kirloskar Motor Private Limited vs. CCE 2011 (3) TMI 1373 - KARNATAKA HIGH COURT wherein the Hon ble High Court has held that for any such type of function organised by the assessee, in the factory premises, for enjoyment of the employees, they are entitled to avail Cenvat credit - credit allowed. Penalties - Held that - As, on merits the assessee is entitled to avail Cenvat credit, therefore, no penalty is imposable on the assessee in the facts and circumstances of the case - penalties are set aside. Appeal allowed by way of remand.
Issues Involved:
1. Availment of Cenvat credit on various services. 2. Management Consultancy Services. 3. Business Exhibition Services. 4. Management Consultancy and Tax Consultancy. 5. Insurance for Finished Goods and Inputs. 6. Insurance of Employees’ Family Members. 7. Lease for Cars. 8. Architecture and Construction Services. 9. Training Services. 10. Pandal and Shamiana Services. Detailed Analysis: 1. Management Consultancy Services: The adjudicating authority initially allowed Cenvat credit for Management Consultancy Services up to March 2012 but later denied it. The services under this head included promotional materials, advertising, market research, accounting, and training, among others. These services are part of the inclusive definition of input services as per Rule 2(l) of the Cenvat Credit Rules, 2004. The tribunal agreed with the earlier order of the adjudicating authority, holding that these services are input services under activities relating to business, finance, audit, accounts, and quality control. Therefore, the assessee is entitled to avail Cenvat credit of ?2,09,34,959/- and ?51,94,595/-. 2. Business Exhibition Services: The Revenue appealed against the adjudicating authority's decision to allow Cenvat credit of ?7,19,438/- for Business Exhibition Services prior to March 2011. The tribunal found that prior to March 2011, the assessee is entitled to avail Cenvat credit on input services availed in the course of their business of manufacturing excisable goods, as per the decision of the Hon’ble Bombay High Court in CCE, Nagpur vs. Ultra Tech Cement Limited. Therefore, the assessee is entitled to avail Cenvat credit of ?7,19,438/-, and the Revenue's appeal was dismissed. 3. Management Consultancy and Tax Consultancy: The Revenue challenged the allowance of Cenvat credit of ?6,65,591/- for Management and Tax Consultancy Services, arguing that these services were not specifically included in the input services definition prior to 01.04.2011. The tribunal held that these services were availed in the course of the assessee's business of manufacturing and allowed the credit. The assessee's appeal for denial of Cenvat credit of ?2,29,288/- was also allowed, as these services are part of the inclusive definition of input services. 4. Insurance for Finished Goods and Inputs: Cenvat credit for Insurance for Finished Goods and Inputs was denied on the grounds that it was not related to manufacturing activity. The tribunal held that insurance for finished goods and inputs is essential for the manufacturing activity, as it covers unforeseen accidents before clearance from the place of removal. Therefore, the assessee is entitled to avail Cenvat credit of ?4,13,645/-. The adjudicating authority's contradictory stance in subsequent periods without assigning reasons was also noted. 5. Insurance of Employees’ Family Members: The Revenue appealed against the allowance of Cenvat credit of ?3,17,791/- for insurance of employees' family members. The tribunal, following the precedent set in Maruti Suzuki India Limited vs. CCE, held that the extended period of limitation is not invokable for denial of Cenvat credit on this ground. The matter was remanded back to the adjudicating authority for quantification of the disallowance amount. 6. Lease for Cars: The tribunal found that the cars were leased for official purposes and used by the employees, relating to the business of manufacturing. Therefore, following the decision in Ultra Tech Cement Limited, the assessee is entitled to avail Cenvat credit of ?77,123/-. 7. Architecture and Construction Services: The tribunal referred to the decision in Bellsonica Auto Components India Pvt. Limited, where the Hon’ble Punjab and Haryana High Court held that services related to setting up a factory are directly or indirectly related to manufacturing. Therefore, the assessee is entitled to avail Cenvat credit of ?61,201/- and ?36,373/-. 8. Training Services: The adjudicating authority denied Cenvat credit for training services on technical grounds, stating that there was no service tax component shown in the invoices. The tribunal examined the invoices and found that the service tax was paid, thus allowing the assessee to avail Cenvat credit of ?19,158/-. 9. Pandal and Shamiana Services: Cenvat credit of ?2,522/- was denied for Pandal and Shamiana Services used for organizing a Diwali function in the factory. The tribunal referred to the decision in Toyota Kirloskar Motor Private Limited vs. CCE, where it was held that such functions for employees' enjoyment entitle the assessee to avail Cenvat credit. Therefore, the assessee is entitled to avail Cenvat credit of ?2,522/-. Conclusion: The appeals filed by the assessee were allowed, and the appeal filed by the Revenue was remanded back to the adjudicating authority for quantifying the disallowance of Cenvat credit on insurance of employees’ family members. No penalties were imposed on the assessee.
|
