2019 (2) TMI 404 - AT - Central Excise

CENVAT Credit - input services - pest control services - site visit fee for national award bill (management consultancy) service - Held that - The product stored by the appellant being sugar and is being used as input for aerated beverages which are used for human consumption, it is essential that the premises are to be kept pest free - the pest control services availed by the appellant are input services - credit allowed. Fees paid by the appellant for site visit by officials of CII - Held that - It is seen from the invoice that the site visit has been made in regard to National Award for Food Safety, 2014. Though in the invoices it stated that these are management consultancy service, it is neither the case of the appellant that they had requested for any management consultancy and the visit is indeed in respect of assessing the appellant with regard to giving an award. This can never be considered as input services - credit cannot be allowed. Appeal allowed in part.

Summary

Issues: Disallowance of CENVAT credit on pest control services and site visit fee for national award bill (management consultancy) service.

In the case, the appellant, engaged in the manufacture of aerated drinks and fruit juice, contested the disallowance of CENVAT credit on pest control services for a godown storing sugar, an essential input for their final products. The appellant argued that maintaining a pest-free environment in the godown was crucial due to the human consumption of the final products. The tribunal agreed, ruling that pest control services were indeed input services directly linked to the manufacturing activity, thus eligible for credit. Consequently, the disallowance of credit on pest control services was set aside.

Regarding the site visit fee paid by the appellant for officials of the Confederation of Indian Industry (CII) in relation to the National Award for Food Safety 2014, the appellant claimed it was a form of management consultancy service. However, the tribunal found that the visit was conducted for the purpose of assessing the appellant for an award and not at the appellant's request for consultancy. As a result, the tribunal upheld the authorities' decision to disallow the credit for the site visit fee, stating that it did not qualify as an input service. The impugned order was modified to allow credit only for pest control services, partially allowing the appeal.