2019 (5) TMI 1481 - AT - Central Excise

CENVAT Credit - input services - services filed in relation to maintenance of Vendor Park maintained by M/s Tata motors ltd where their factory is located - HELD THAT - The appellants are entitled for the Cenvat Credit on the maintenance services provided by Tata Motors Ltd. in respect of maintenance activities in respect of Tata Vendor Park - reliance placed on the decision of the Tribunal in the case of CUMMINS TECHNOLOGIES INDIA PVT LTD VERSUS C.G.S.T. C.E., INDORE 2019 (2) TMI 1231 - CESTAT NEW DELHI wherein credit was denied for similar services provided by M/s AKVN in respect of such common services where it was held that maintenance charges are also the eligible inputs - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of Cenvat Credit on services related to maintenance of Vendor Park maintained by another company.

Analysis:
The appeal was filed against the denial of Cenvat Credit on services related to the maintenance of a Vendor Park by M/s Tata Motors Ltd. The appellant argued that the services, including maintenance of roads, drainage, lighting, and effluent treatment, were essential for their manufacturing activity, even if some services were availed outside the factory premises. On the other hand, the respondent contended that since the services were availed outside the factory premises, the credit was inadmissible and not related to manufacturing of goods.

Upon considering the submissions, the Tribunal referred to a previous decision involving Cummins Technologies India Pvt. Ltd. where a similar denial of credit was overturned. The Tribunal highlighted that the maintenance charges, though for the industrial area beyond the factory, were calculated based on the leased factory area where the final product was manufactured. Drawing parallels to another case, the Tribunal emphasized that maintenance charges indirectly related to the business, such as roads, street lights, and drainage, were eligible inputs as they were charged based on the business premises occupied. The Tribunal also distinguished the case from Ultratech Cement, emphasizing that the maintenance charges were for the place of manufacture, not for clearance of goods.

Based on the precedent and analysis, the Tribunal held that the appellants were entitled to Cenvat Credit on the maintenance services provided by Tata Motors Ltd. for the Vendor Park. Consequently, the appeal was allowed, setting aside the earlier order denying the credit.

In conclusion, the Tribunal's decision established that maintenance charges related to the Vendor Park were eligible inputs for Cenvat Credit, as they were deemed essential for the manufacturing activity and directly linked to the business premises. The judgment provided clarity on the admissibility of credit for services availed outside the factory premises but crucial for the manufacturing process, aligning with previous rulings and legal interpretations in similar cases.