2024 (4) TMI 670 - AT - Central Excise

CENVAT Credit - input service - hiring of aircraft - services were used for furtherance of cost of the business of manufacture of the goods or not - HELD THAT - The definition of the input service is wide enough to cover all the services received by the appellant as input services without being directly used in the process of manufacture. If it is establish that the services were used by the manufacturer for the production of the finished goods which is one of the criteria to credit could not have been denied. In the present case, Commissioner (Appeals) have concluded that charter services were raised for transportation of the senior executive officials of the company for attending the business meeting in relation of the manufacture and sale of finished goods. In case of MANGALORE REFINERY AND PETROCHEMICALS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE CENTRAL TAX, MANGALORE COMMISSIONERATE 2021 (6) TMI 715 - CESTAT BANGALORE , the Bangalore bench has held as far as air travel charges are concerned, the same has been used for the purpose of business trips undertaken by the company officials/guests for business related purposes and the same has been held to be input service. There are no reason to differ with the findings recorded in the impugned order by Appellate Authority and the same is upheld - appeal dismissed.

Summary

Issues involved:
The appeal challenges the Order-in-Appeal passed by the Commissioner (Appeals) Central Goods & Services Tax, Meerut. The main issue revolves around the definition of 'input service' and whether hiring aircraft services for transportation of senior officers can be considered as an 'input service' u/s Rule 2(I) of the Rules.

Issue 1: Interpretation of 'input service' definition:
The appellant contends that not all services procured by a manufacturer can be treated as 'input service' unless they fall within the defined scope. The hiring of aircraft services, used for senior officers' transportation, is argued to lack any connection with manufacturing activities, thus not qualifying as an 'input service.'

Details:
The Commissioner (Appeals) analyzed the usage of air charter services for top management's travel, emphasizing the necessity and integral connection of such services with the manufacturing and sale of goods. It was established that the travel was in connection with business activities, not for personal consumption, making it eligible as an 'input service' u/s Rule 2(I) of the Rules.

Issue 2: Eligibility of services for Cenvat credit:
The discussion focuses on whether services need to be directly used in the manufacturing process to qualify as 'input services' for claiming Cenvat credit. The Commissioner (Appeals) highlighted that services utilized by the manufacturer for the production of finished goods, even indirectly, meet the criteria for credit eligibility.

Details:
Citing precedents such as Goodluck Steel Tubes Ltd. and Carrier Airconditioning & Refrigeration Ltd., the Commissioner (Appeals) supported the view that services like air travel for business purposes are covered under the definition of 'input service.' The decision was reinforced by rulings from other cases like Godrej and Boyce Mfg Co Ltd. and Mangalore Refinery And Petrochemicals Ltd., which upheld the eligibility of air travel charges as input services.

In conclusion, the Appellate Tribunal upheld the impugned order, emphasizing the inclusive nature of the 'input service' definition and the direct nexus between the services availed and the business activities of manufacturing and sale of goods. The appeal challenging the Order-in-Appeal was dismissed, affirming the eligibility of air charter services as 'input services' for claiming Cenvat credit.