2019 (7) TMI 149 - AT - Central Excise

CENVAT Credit - input services - services of Annual Maintenance Charges (AMC) of visi coolers located at their Dealer/Retailer s premises - HELD THAT - Even though the visi coolers are installed at the Retailer/Dealer s premises but the same are owned by the appellant therefore the service of AMC of visi coolers were received by the appellant which is in relation to their business activity as sales promotion and advertisement. The sales promotion and advertisement is specifically mentioned in the inclusive clause of the definition in terms of Rule 2(l) of Cenvat Credit Rules, 2004. Therefore, the AMC service of visi coolers, which are owned by the appellants, is an input service and accordingly, the Cenvat credit is admissible. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Entitlement to Cenvat credit for services of Annual Maintenance Charges (AMC) of visi coolers located at Dealer/Retailer's premises.

Analysis:
The issue in the present appeal before the Appellate Tribunal CESTAT Ahmedabad was whether the appellant is entitled to Cenvat credit for the services of Annual Maintenance Charges (AMC) of visi coolers situated at Dealer/Retailer's premises. The appellant contended that the visi coolers, although located at the Dealer/Retailer's premises, were owned by them and used for sales promotion and advertisement bearing their brand name. The appellant argued that the service of AMC is directly related to sales promotion and advertisement, falling under the inclusive clause of the definition of Input Service as per Rule 2(l) of Cenvat Credit Rules, 2004. The appellant cited various judgments in support of their argument.

The counsel for the appellant requested to hear another appeal with a similar issue involving the same party together for disposal. The lower authorities had denied Cenvat credit on the grounds that the visi coolers were not situated on the appellant's premises. However, the appellant argued that since the visi coolers were owned by them and used for business activities like sales promotion, the service of AMC was related to their business activity. The Revenue, represented by the Assistant Commissioner, reiterated the findings of the impugned orders, stating that the appellant was not entitled to Cenvat credit as the visi coolers were installed outside their premises.

After hearing both sides and examining the records, the Tribunal found that even though the visi coolers were located at the Dealer/Retailer's premises, they were owned by the appellant. Therefore, the service of AMC for these visi coolers, which was in relation to the appellant's business activity of sales promotion and advertisement, qualified as an input service under the inclusive clause of the Cenvat Credit Rules, 2004. Consequently, the Tribunal set aside the impugned orders and allowed both appeals, ruling in favor of the appellant. The judgment was pronounced in open court by the Tribunal.