2013 (6) TMI 590 - AT - Service Tax

Cenvat credit of Service Tax relating to rental of immovable property, security guard appointed at the residence of central office and cycle stand, maintenance of registered office at Kolkata and corporate office at New Delhi and telephone/courier services etc. - Held that - The objection of the lower authorities that such services were not availed at Jaipur but at places other than the place of manufacture, do not carry weight in view of various precedent decision of the Tribunal. In the case of Jaypee Rewa Cement Plant V. CCE, Bhopal 2009 (7) TMI 488 - CESTAT, NEW DELHI , it was observed that input services rendered outside manufacturing premises are eligible for credit if the same are related to business activities. Similarly, in the case of Indian Rail and Industries Ltd. 2006 (8) TMI 7 - CESTAT, MUMBAI , it was observed that there is no such stipulation that the input services must be provided or received in the factory of manufacture. Inasmuch as there is no dispute about the fact that services disputed in the present appeals are covered by the definition of input services, and are used by the appellants in relation to their business activities at Jaipur, the same are eligible cenvatable input services. - Decided in favor of assessee.

Summary

Issues:
Cenvat credit eligibility for services received at locations other than the place of manufacture.

Analysis:
The judgment by Ms. Archana Wadhwa of the Appellate Tribunal CESTAT NEW DELHI involved three appeals with a common issue of Cenvat credit eligibility for services utilized by the appellants in their manufacturing activities. The appellants were engaged in manufacturing ball bearings and axel box in Jaipur but maintained offices in Kolkata and New Delhi. The dispute centered around the Cenvat credit of Service Tax for various services like rental of immovable property, security guard services, maintenance of offices, and telephone/courier services, received at locations away from the place of manufacture. The appellants argued that these services qualified as input services under Rule 2(1) of Cenvat Credit Rules, 2004.

The definition of input services under Rule 2(1) of the Cenvat Credit Rules, 2004 was crucial in determining the eligibility of the disputed services for Cenvat credit. The definition encompassed services used directly or indirectly in the manufacture of final products and clearance of final products, including activities related to business. The judgment highlighted that the definition did not limit itself to services directly related to manufacturing activities but extended to services used for business purposes, such as those availed at offices maintained for business activities related to the goods being manufactured.

The Tribunal rejected the Revenue's contention that services received at locations other than the place of manufacture were ineligible for Cenvat credit. Citing precedent decisions, the Tribunal emphasized that services rendered outside manufacturing premises could be eligible for credit if they were related to business activities. The judgment referred to cases like Jaypee Rewa Cement Plant V. CCE and Indian Rail and Industries Ltd., which supported the eligibility of input services for credit irrespective of the location of service provision.

Ultimately, the Tribunal ruled in favor of the appellants, holding that the disputed services fell within the definition of input services and were utilized in relation to the business activities at the manufacturing location in Jaipur. Consequently, the impugned orders were set aside, and all appeals were allowed with consequential relief granted to the appellants. The decision was pronounced in open court on 28-12-2012, providing clarity on the eligibility of Cenvat credit for services received at locations other than the place of manufacture.