2019 (11) TMI 117 - AT - Central Excise

CENVAT Credit - input services - Cab Operator - Commercial and industrial construction for canteen - Tarpaulin shed supply of tangible goods for use - Air Travel Agency - Cleaning Activity - Travel Agency - Courier Service. Cab-operator services - HELD THAT - As per the use of services explained by the appellant, the appellants are entitled for the Cenvat Credit. The cab operator service is used by the employees for attending outside work. And the same is not used for their personal use or consumption - Therefore, having considering the exclusion clause which came into force from 01 April, 2011, cab operator service is indeed used for the business of the appellant s company - it is an eligible input service. Commercial and Industrial Construction service - services used for construction of canteen which is a part of setting-up of factory which is specifically included in the exclusion clause of definition of input services up to 01 April, 2011 - HELD THAT - The appellant have given up the claim of credit on these services amounting to ₹ 1,00,435/- for the period after 01 April, 2011 - the demand of the same is upheld. Erection of Tarpaulin shed - HELD THAT - It is observed that temporary shed is used for storage of raw material and finished goods for protection of the goods from rain water. Therefore, it is directly used in or in relation to manufacture of final product. Air Travel Agency - HELD THAT - The air travelling is used by the employees of the company for company s business work. Therefore, it is not the service which is used for individual, the service is used in or in relation to the business of the company. Hence, use of service is for the company and not for the individual. Cleaning activity - HELD THAT - Since it is marble manufacturing industry, it creates lot of dust and particles which needs to be cleaning on regular basis to carry uninterrupted production activity. Similarly, the pest control is also very much necessary for such pollution prone industries. Therefore, cleaning activity is directly used in the manufacture of the final product. Travel agency service - HELD THAT - Travel agency service is again used for the employees for performing the outside duties for the companies. Therefore, it is used for the overall business of the company not for the individual s personal use. Courier service - HELD THAT - Courier service is used for movement of samples, raw materials and mostly for authorized documents such as orders, quotations, marketing documents, instruction, cheques, etc. These activities are directly used in or in relation to manufacture as well as business of the appellant s company. Revenue could not bring anything on record contrary to the use of services presented by the appellant - all the services are indeed input services and eligible for Cenvat Credit. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Admissibility of Cenvat Credit for various services including cab operator, commercial and industrial construction for canteen, tarpaulin shed supply, air travel agency, cleaning activity, travel agency, and courier service.

Analysis:

1. Cab Operator Service: The appellant justified the Cenvat Credit for cab operator service by highlighting that it was used for company work, not personal use, citing relevant judgments. The tribunal agreed, considering the exclusion clause from April 2011, and deemed it an eligible input service.

2. Commercial and Industrial Construction Service: The service was used for constructing a canteen, falling under the exclusion clause up to April 2011. The appellant conceded the credit post that period, leading to the demand being upheld.

3. Erection of Tarpaulin Shed: The temporary shed was used for protecting raw materials and goods from rain, directly related to manufacturing activities, justifying its eligibility for Cenvat Credit.

4. Air Travel Agency Service: The air travel was for company business, not individual use, supporting its relevance to the company's operations and making it an eligible input service.

5. Cleaning Activity: Given the dust-prone nature of marble manufacturing, cleaning and pest control activities were crucial for uninterrupted production, making them directly related to manufacturing the final product and eligible for Cenvat Credit.

6. Travel Agency Service: Used for employees' outdoor duties related to company operations, establishing its relevance to the business and justifying its eligibility for Cenvat Credit.

7. Courier Service: Utilized for movement of samples, raw materials, and essential documents, directly contributing to manufacturing and business activities, supported by various judgments. The tribunal found all services to be valid input services eligible for Cenvat Credit, setting aside the impugned order and allowing the appeals.

The appellant's arguments, supported by relevant case laws, successfully demonstrated the direct or indirect use of the services in relation to the manufacturing activities of the company, justifying the admissibility of Cenvat Credit. The tribunal's detailed analysis of each service in light of the provided explanations and legal precedents led to the favorable decision in favor of the appellant, emphasizing the broad definition of input services and the importance of considering the specific context of usage in such cases.