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2013 (7) TMI 370 - AT - Service TaxCenvat Credit - Input Services - Rule 2(l) - Business support services - Input to be integrally connected with business of manufacture of final product Held that - As per decision in the case of CCE Nagpur vs. Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT - The criteria for coverage of input services is that the same is integrally connected with business of manufacture of final product and the scope of the definition being very wide the same would cover services not only used directly or indirectly in or in relation to the manufacture of final products but also various services used in relation to business of manufacture whether prior to manufacture or after manufacture . The definition of input service seeks to cover every conceivable service used in business of manufacture. Similarly in the case of Coca Cola India Pvt. Ltd. vs. CCE Pune - III reported in 2009 (8) TMI 50 - BOMBAY HIGH COURT it stands held that the term business appearing in the definition of input service cannot be given a restricted definition. - Decided in favor of Assessee.
Issues:
Dispute over Cenvat credit availed by the appellant for various services, denial of credit in respect of business support service, and challenge by both the appellant and Revenue against the Commissioner (Appeals) order. Analysis: Issue 1: Cenvat Credit on Various Services The appellant, a 100% EOU manufacturing Sound Signaling equipments, faced a show cause notice disallowing Cenvat credit on services like CHA service, courier service, catering service, medical claim insurance, rent a cab, general insurance, and business support service. The Additional Commissioner confirmed the denial of credit amounting to &8377; 12,66,562 along with a penalty. On appeal, the Commissioner (Appeals) allowed credit for various services but denied it for business support service to the extent of &8377; 10,59,538. The appellant challenged the denial, while the Revenue contested the allowance of Cenvat credit for other services. Issue 2: Denial of Business Support Service Credit The appellant availed business support services from M/s Minda Acoustics Ltd., encompassing security, cleaning, housekeeping, canteen, reception, maintenance of common areas, and facilities like ETP, STP, EPBX, WTP, DG sets, air compressors, and chilling plant. The Revenue contended that these services were not admissible as Cenvatable input services. However, referencing legal precedents, it was established that input services must be integrally connected with the business of manufacturing the final product. The definition of input service is broad, covering services related to the business of manufacture, whether before or after production. Applying this interpretation, the Tribunal found the business support services provided by M/s Minda Acoustics Ltd. to be directly related to the appellant's business activities, falling within the definition of input services, and allowed the appeal. Issue 3: Commissioner (Appeals) Order The Commissioner (Appeals) had allowed credit for various services like courier, bank services, tour operator, rent a cab, insurance of plant and machinery, and group insurance, relying on precedent decisions. The Tribunal noted that these issues were already settled by earlier judgments, citing the decisions of the Hon'ble Karnataka High Court and other cases. Consequently, the Tribunal found no grounds to interfere with the Commissioner (Appeals) order and rejected the Revenue's appeals. All the appeals were disposed of accordingly. This detailed analysis of the judgment highlights the key issues, arguments, legal interpretations, and outcomes, providing a comprehensive understanding of the case.
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