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2012 (9) TMI 235 - AT - Service TaxCenvat Credit on input services - denial of credit on the input service on the ground that these services were not used in or in relation to the manufacture of final product Held that - CAS-4 has considered all the services such as medical benefit, subsidized food, education allowance, canteen bill, etc., to form part of the cost of final products. Therefore, I agree with the learned Chartered Accountant that these services which have been received have been rendered only in relation to the manufacture of the final products - Cenvat credit on input services namely, Courier service and insurance premium on vehicles cannot be denied - these services are related to activity of business.
Issues:
- Denial of Cenvat Credit on input services like Courier service and insurance premium for personal use of cars. Analysis: The appeal was filed by the Revenue against the Order of the Commissioner (Appeals) which allowed Cenvat Credit on input services, specifically Courier service and insurance premium for personal use of cars. The Revenue contended that Courier services were not used directly or indirectly in the manufacturing process and that the respondents failed to provide documentary evidence of correspondence with customers or suppliers. They also argued that the cars for which insurance premium was paid were used for personal purposes, and the Commissioner (Appeals) did not verify the evidence before passing the order. On the other hand, the respondents argued that the documents produced were duly verified, and the Cenvat credit on input services was eligible based on precedents set by the Tribunal in various cases. The Tribunal had previously held that services like Courier service and insurance premium on vehicles cannot be denied as they are related to business activities. The Commissioner (Appeals) observed that these services were indeed used in business activities, contrary to the original authority's denial based on their use in the manufacture of final products. The Tribunal referred to a specific case where it was established that services received, even those seemingly unrelated to manufacturing, could be considered input services under the broad definition. The Tribunal highlighted the importance of maintaining the environment of a factory and included services like landscaping as eligible for Cenvat credit. The Tribunal found no justification to interfere in the Commissioner (Appeals) order, as the documents provided by the respondents were verified to be in order, and the denial of Cenvat credit was unfounded. As a result, the appeal filed by the Revenue was rejected, upholding the decision of the Commissioner (Appeals).
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