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2022 (6) TMI 974 - AT - Central ExciseCENVAT Credit - input services - Supply of Tangible Goods services - Hiring forklifts for use of handling the material within the factory - HELD THAT - The contention of the revenue is not correct in as much as it contends that the Supply of Tangible Goods service is not falling under definition of Input service in terms of Rule 2(l) of Cenvat credit Rules, 2004. Though, it is agreed that it does not appear in the inclusion clause of definition however, the main clause of definition is very wide. There is no dispute that the Forklift which is taken on hire under Supply of Tangible Goods service are indeed used for handling all the material which is the part and parcel of process of manufacturing the final product within the factory. Therefore, the forklift which is taken on hire is directly used for the activity of manufacturing of final product. The identical issue has been considered by this Tribunal in the case of LARSEN TOUBRO LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE MUMBAI II 2018 (2) TMI 537 - CESTAT, MUMBAI wherein the Cenvat Credit in respect of supply for tangible goods service has been allowed - Similarly, in the case of DBOI GLOBAL SERVICES PVT LTD VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI 2016 (11) TMI 521 - CESTAT MUMBAI the credit on Supply of Tangible Goods service i.e. in respect of electronic equipments has been decided in the favour of the assessee. Credit allowed - appeal allowed - decided in favor of appellant.
Issues involved: Whether the appellant is entitled to Cenvat Credit for service tax paid on Supply of Tangible Goods services, specifically for hiring forklifts for material handling within the factory.
Analysis: 1. The issue in this case revolves around the eligibility of the appellant for Cenvat Credit concerning service tax paid on Supply of Tangible Goods services, particularly for hiring forklifts for material handling within the factory. The appellant argued that the forklifts hired under this service were used in the factory premises for handling material related to the manufacturing of the final product, thus falling under the definition of input services as per Rule 2(l) of the Cenvat Credit Rules, 2004. 2. The learned counsel for the appellant cited judgments, including Larsen & Tourbo Ltd and DBOI Global Services Pvt. Ltd, to support their claim that the forklifts hired under Supply of Tangible Goods services are indeed used directly for the manufacturing activity of the final product, making them eligible for Cenvat Credit. 3. On the other hand, the Joint Commissioner representing the revenue reiterated the findings of the impugned order, denying the Cenvat Credit. 4. After careful consideration of both sides' submissions and perusal of records, the Hon'ble Member (Judicial) noted that while the Supply of Tangible Goods service is not explicitly included in the inclusion clause of the definition of input service, the main clause of the definition is broad. The Member found that the forklifts hired under this service were directly used for handling material integral to the manufacturing process of the final product within the factory, making them eligible for Cenvat Credit. 5. Referring to previous judgments, particularly Larsen & Tourbo Ltd and DBOI Global Services Pvt. Ltd, where Cenvat Credit for Supply of Tangible Goods services was allowed, the Member concluded that the appellant is entitled to Cenvat Credit for such services. Consequently, the impugned order was set aside, and the appeal was allowed.
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