2021 (3) TMI 630 - AT - Service Tax

CENVAT credit - input services - Dredging Services - Marine Consultancy Services provided by the service provider for smooth navigation of the vessels at private jetty which is used by the appellant - denial on the ground that the place where this service is provided does not belong to the appellant and, it was used by the other jetty owners also - HELD THAT - There is absolutely no dispute that the appellant themselves are the service recipient. They borne the service charges along with service tax paid by the service provider. The service was availed for smooth navigation of vessels at the private jetty. Therefore the service was indeed received by the appellant and the same was used for their business purpose. The expenses of the service was also borne by the appellant which was not in dispute rather they have submitted an affidavit of the service provider that the entire service charge was paid by the appellant and no any amount was recovered from any other private jetty owner. It is immaterial that where is the location of the service was provided. It is important to see that irrespective of such services have been provided anywhere but it is for the purpose of the assessee and it is received by the assessee. If that test is qualified then it cannot be said that the service was not received by the assessee. Thus the appellant is entitled to Cenvat credit. Reliance also placed in the case of M/S. SANGHI INDUSTRIES LTD AND OTHERS VERSUS C.C.E. S.T., RAJKOT AND OTHERS 2019 (12) TMI 528 - CESTAT AHMEDABAD where it was held that credit of the dredging service provided at the private jetty has been allowed. There is no reason to deny Cenvat credit in respect of Dredging and Marine Consultancy Service - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Entitlement to Cenvat credit for Dredging Services and Marine Consultancy Services provided at a private jetty.

Analysis:
The issue at hand revolves around the entitlement of the appellant to Cenvat credit for Dredging Services and Marine Consultancy Services provided at a private jetty. The Adjudicating Authority had denied the credit on the grounds that the services were not provided at a location belonging to the appellant and were also used by other jetty owners. However, the appellant contended that they were the sole recipients of the services, bore the expenses, and utilized the services for their business purposes, thus falling under the ambit of Input Service as defined under the Cenvat Credit Rules, 2004.

In support of their argument, the appellant's counsel cited various judgments, including those of Coca Cola India Pvt. Limited, Ultratech Cement Limited, Deepak Fertilizers & Petrochemicals Corporation, among others. The Revenue, represented by the Superintendent, reiterated the findings of the lower authority as stated in the impugned order.

Upon careful consideration of the submissions from both sides and a thorough examination of the facts, the Member (Judicial) concluded that the appellant was indeed the service recipient, had borne the service charges, and utilized the services for their business operations. The appellant submitted an affidavit from the service provider confirming that the entire service charge was paid by the appellant without any contribution from other jetty owners. The Member emphasized that the crucial criteria for allowing Cenvat credit included the receipt of service, payment to the service provider with service tax, and the use of the service for business purposes. These criteria were met in the present case, irrespective of the location where the services were provided.

Drawing parallels with previous judgments, notably the case of Sanghi Industries Limited, where the Tribunal allowed credit for dredging services related to the business of the company, the Member held that the appellant was entitled to Cenvat credit for the services provided at the private jetty. Additionally, referencing the case of Saurashtra Cement Limited, the Member reiterated that the location of service provision was immaterial as long as it was in relation to the manufacture of the final product, thereby qualifying for Cenvat credit.

In light of the consistent legal precedents and the specific circumstances of the case, the Member set aside the impugned order and allowed the appeal, thereby granting the appellant the entitlement to Cenvat credit for the Dredging and Marine Consultancy Services provided at the private jetty.