2023 (2) TMI 66 - AT - Central Excise

CENVAT Credit - input service - Business Auxiliary Services - Housekeeping services - sub-rule (1) of Rule 3 of the Cenvat Credit Rules, 2004 - levy of interest and penalty. HELD THAT - The Ld. Commissioner (Appeals) has dismissed the appeal of the appellant solely on the ground that the demand on a similar issue in the appellant s own case was confirmed against the appellant by the Principal Bench of this Tribunal in COMMISSIONER OF C. EX., DELHI-III VERSUS MARUTI SUZUKI INDIA LTD. 2015 (10) TMI 113 - CESTAT NEW DELHI . Further, it is found that the Ld. Commissioner (Appeals) has failed to consider the subsequent rectification order dated 18.03.2016 passed by this Tribunal, allowing the rectification of mistake by recalling the order in MARUTI SUZUKI INDIA LTD. Further, on the analysis of the definition of input service as provided in Rule 2(l) of Cenvat Credit Rules, 2004 that the computer networking is specifically included in the includes clause of the definition of input services. The impugned order is not sustainable in law - Appeal allowed.

Summary

Issues:
- Incorrect availing of cenvat credit on 'Business Auxiliary Services' and 'Housekeeping services'
- Dismissal of appeal by Ld. Commissioner (Appeals) based on past tribunal decision
- Nexus of network cable services with manufacturing process for cenvat credit eligibility
- Burden of proof on appellant for defining 'input service'
- Interest and penalty imposition when duty payment not required

Analysis:
1. The appellant availed cenvat credit on 'Business Auxiliary Services' and 'Housekeeping services,' leading to show cause notices for incorrect credit utilization.
2. The Ld. Commissioner (Appeals) dismissed the appeal, citing a previous tribunal decision against the appellant on a similar issue.
3. The appellant argued that subsequent rectification orders and finality of previous decisions supported their claim for cenvat credit.
4. The Ld. AR contended that the network cable services lacked nexus with manufacturing, challenging the eligibility as an 'input service.'
5. The Tribunal noted the dismissal of the department's appeal and the finality of previous decisions in favor of the appellant.
6. The definition of 'input service' under Cenvat Credit Rules, 2004 includes computer networking, supporting the appellant's claim.
7. Various court decisions were cited to establish the broad interpretation of terms like 'in relation to' and 'includes' in defining 'input service.'
8. Considering the legal precedents and the nexus of network services with business operations, the Tribunal allowed the appeal, setting aside the impugned order.
9. The judgment emphasized the expansive interpretation of 'input service' and the need for a nexus with business activities for cenvat credit eligibility.
10. Interest and penalty imposition were deemed unnecessary when the duty payment itself was not liable, aligning with the appellant's argument.

This detailed analysis of the judgment highlights the issues, arguments presented by both parties, legal interpretations, and the final decision by the Tribunal, ensuring a comprehensive understanding of the case.