2018 (10) TMI 527 - AT - Central Excise

CENVAT Credit - input services received from Foreign service provider - reverse charge mechanism - place of removal - Held that - In both the orders of the lower authorities, it was not disputed that all the services are related to Sales Promotion Marketing of the goods exported by the appellant, therefore, even though services even not used in the manufacture of final product or upto place of removal, credit is admissible by virtue of inclusion clause of definition under Rule 2(l) of Cenvat Credit Rules, 2004. From the definition of input service, it can be seen that in the inclusion clause, Sales Promotion Marketing etc. are specifically included in the definition. This inclusion removes any doubt that even though these services were not used in relation to manufacture but by specific inclusion, credit was allowed. There is no doubt that the services in question are input service in terms of definition of input service - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Whether the appellant is entitled to cenvat credit for services related to Sales Promotion Marketing received from a foreign service provider, on which service tax was paid under reverse charge.

Analysis:
1. The department contended that the services received from overseas were not used in the manufacture of final products or up to the place of removal, thus denying cenvat credit.

2. The appellant argued that services related to Sales Promotion Marketing were received from overseas, and even though not used in manufacturing or up to the place of removal, credit should be allowed as per the inclusion clause of the definition of input service under Rule 2(l) of Cenvat Credit Rules, 2004. The appellant cited various judgments to support this argument.

3. The Additional Commissioner representing the Revenue reiterated the findings of the impugned order.

4. The presiding Member considered the submissions and records, noting that all services were related to Sales Promotion Marketing of goods exported by the appellant. The inclusion clause of Rule 2(l) of Cenvat Credit Rules, 2004 specifically includes services like Sales Promotion and Marketing, making the credit admissible even if not used in the manufacture of final products or up to the place of removal.

5. Consequently, the Member concluded that the services in question qualified as input services under the definition, and therefore, the credit was deemed admissible. The impugned orders were set aside, and the appeals were allowed.

This judgment clarifies that services related to Sales Promotion Marketing, even if not directly used in manufacturing or up to the place of removal, can still qualify for cenvat credit based on the specific inclusion clause in the definition of input service under the Cenvat Credit Rules, 2004.