2014 (3) TMI 5 - AT - Central Excise

Imposition of penalty - Denial of CENVAT Credit - Credit in respect of the service tax paid on CHA services, Telephone charges, Insurance charges and repairs and maintenance of factory, courier services and motor vehicle repair charges - Held that - The credit in respect of CHA services, Telephone charges, Insurance charges, repair and maintenance of factory and courier services is allowed. In respect of repair of motor vehicles I find no infirmity in the impugned order where the same has been disallowed as there is no nexus between the services and the activity of manufacture - demand denying credit on CHA service, telephone service, insurance charges, repair and maintenance of factory and courier service is set aside and consequently the penalties are also set aside. The demand with interest and consequential penalty in respect of denial of credit on repair of motor vehicles is upheld - Decided partly in favour of assessee.

Summary

Issues:
Denial of credit on service tax paid for various services like CHA services, Telephone charges, Insurance charges, repairs and maintenance of factory, courier services, and motor vehicle repair charges.

Analysis:
The appellant filed appeals against impugned orders denying credit on the mentioned services for not being used for the manufacture of excisable goods. The appellant relied on Tribunal decisions to support the admissibility of the credit. The Revenue contended that only input services used in or in relation to the manufacture of goods are eligible for credit. The Tribunal examined the cited decisions and allowed credit for CHA services, Telephone charges, Insurance charges, repair and maintenance of factory, and courier services. However, credit for repair of motor vehicles was disallowed due to the lack of nexus with the manufacturing activity.

In line with the Tribunal decisions, the demand denying credit on CHA service, telephone service, insurance charges, repair and maintenance of factory, and courier service was set aside, along with the associated penalties. Conversely, the demand for denial of credit on repair of motor vehicles, as there was no connection with the manufacturing process, was upheld. Both appeals were disposed of accordingly.