2023 (11) TMI 304 - AT - Central Excise

CENVAT Credit - input services - Renting of immovable property - Business support services and Business Auxiliary service - Election Commissioning Service - Sponsorship services - Warehouse services - General insurance services - Courier services - Telephone services - Air Travel Agency - Pandal and Shamiyana Services - Credit denied mainly on the ground that since all the subject services are not mentioned in the inclusive part of the definition, the same do not qualify as input service - period August 2012 to November 2012 - HELD THAT - Since a manufacturing unit when manufacture goods there are various activities of the services which are used directly or indirectly exclusively in relation to the manufacture of the goods. it is not a case of the department that the appellant is carrying out any other activity other than the manufacture - only on the ground that the input services are not mentioned in the inclusive part of the definition cannot be a reason for denial of Cenvat Credit. Since the appellant are exclusively involved in manufacturing operational in both their unit. The corporate office is operated only for the operation of the manufacturing of the final product. Therefore, it cannot be said that the corporate office is not used in or in relation to manufacture of final product. All the services are admissible input service qualify under the definition of input service provided under Rule 2(l) of the Cenvat Credit Rules, 2004. Therefore, the appellant are clearly entitled for the Cenvat Credit on such services. The impugned order is set aside, appeal is allowed.

Summary

Issues involved:
The judgment involves the demand of Cenvat Credit for various services from August 2012 to November 2012, specifically related to renting of immovable property, business support services, election & commissioning service, sponsorship services, warehouse services, general insurance services, courier services, telephone services, air travel agency, and pandal and shamiyana services. The main issue was whether these services qualify as input services under Rule 2(l) of Cenvat Credit Rules, 2004.

Renting of Immovable Property Services:
The Adjudicating authority denied credit for renting of immovable property services, stating that it had no nexus with the manufacturing unit. However, the Tribunal found that the renting of premises for the corporate office was directly related to the manufacturing activities, making it eligible for Cenvat Credit.

Interpretation of Inclusive Definition:
The Tribunal emphasized that the main part of the definition of input service under Rule 2(l) is broad enough to cover services used directly or indirectly in relation to the manufacture of final products. The inclusive part of the definition is meant to avoid misinterpretation, and denial of credit based on services not explicitly mentioned in the inclusive part is not justified.

Judgments Supporting Input Services:
Various judgments were cited to support the eligibility of the services in question as input services, including decisions related to business support/auxiliary services, erection and commissioning services, sponsorship services, warehouse services, general insurance services, courier services, telephone services, air travel agency services, and pandal and shamiyana services. The Tribunal concluded that based on these precedents, all the services were admissible input services qualifying under the definition of input service in the Cenvat Credit Rules, 2004.

Decision:
Considering the submissions and legal provisions, the Tribunal set aside the impugned order and allowed the appeal, stating that the appellant was entitled to Cenvat Credit on the services in question. The judgment was pronounced in open court on 06.11.2023.