2021 (5) TMI 175 - AT - Central Excise

CENVAT Credit - input services - Air Travel Agent Service /Rail Travel Agent Service - Real Estate Agent Service - denial on the ground that these services have no direct or indirect relation to the manufacturing activity of the appellant - HELD THAT - The sample invoices were produced before the adjudicating authority and reason for denial of cenvat credit is that the services in question have no direct or indirect relation to the manufacturing activity of the appellant. It is not a case where the appellant has not provided the sample invoices of the services on which they have taken cenvat credit. In these circumstances, the services in question are having direct relation with the manufacturing activity of the appellant. CENVAT Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of cenvat credit on input services - 'Air Travel Agent Service /Rail Travel Agent Service' and 'Real Estate Agent Service' due to lack of relation to manufacturing activity.

Analysis:
1. Issue of Denial of Cenvat Credit on Input Services: The appellant, a manufacturer of paints, appealed against the denial of cenvat credit on input services like 'Air Travel Agent Service /Rail Travel Agent Service' and 'Real Estate Agent Service' by the adjudicating authority and the Commissioner (Appeals). The reason for denial was the perceived lack of direct or indirect relation of these services to the manufacturing activity of the appellant.

2. Appellant's Submission: The appellant contended that the travel services availed by their officials were solely for official purposes related to procurement of raw materials and selling of goods, which directly linked them to the manufacturing activity. Additionally, for the Real Estate Agent Service, the appellant argued that the payment of service tax on brokerage for arranging warehouses for storage of goods was also directly related to their manufacturing activity.

3. Opposing Argument: The authorized representative of the appellant submitted relevant invoices to support their claim for cenvat credit. However, the respondent argued that the appellant failed to provide necessary documents to the adjudicating authority, leading to the denial of cenvat credit.

4. Decision and Analysis: Upon review, the tribunal found that sample invoices were indeed presented before the adjudicating authority, contradicting the claim that documents were not provided. The tribunal concluded that the services in question did have a direct relation to the manufacturing activity of the appellant. Consequently, the tribunal set aside the impugned order and allowed the appellant to claim the cenvat credit on the disputed input services.

5. Conclusion: The tribunal allowed the appeal, granting consequential relief to the appellant. The decision emphasized the direct relation of the input services to the manufacturing activity, thereby overturning the denial of cenvat credit.