2014 (9) TMI 27 - AT - Central Excise

CENVAT Credit - nexus with the activity of providing services under the category of Business Auxiliary Services and Goods Transport Agency Service - Held that - Services have been provided in a residential colony which was not having any nexus with the business activity of the assessee but in this case the CENVAT Credit have been availed by the respondent for their activity of coal washing. Therefore, as per the decision of the Hon ble High Court of Bombay in the case of Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT , reported in wherein the Hon ble High Court has held that any provider of output service is entitled for input service credit on the services availed by them in the course of their business activity. There is no doubt that all the services availed by the respondent for the activity of coal washing only. Therefore, I hold that the respondent is entitled for input service credit for all the service discussed here-in-above. In the circumstances, I do not find any infirmity with the impugned order and the same is upheld - Decided against Revenue.

Summary

Issues:
- Appeal against the impugned order allowing CENVAT Credit on various services
- Nexus of the services with business activity for input service credit eligibility

The judgment involves an appeal against an order allowing CENVAT Credit on services like road construction, photocopies, valuation fees, bank loan rating fees, excavation, insurance policy, JCB piston repairing, security charges, and coal transportation. The Commissioner (Appeals) allowed the appeal based on the nexus of these services with the activity of providing "Business Auxiliary Services" and "Goods Transport Agency Service." The Revenue contended that these services had no nexus with the respondent's services, citing a judgment of the Hon'ble High Court of Bombay in a previous case. The Tribunal considered the submissions and case law, noting that the services were availed for the activity of coal washing. Referring to a judgment in the case of Ultratech Cement Ltd., the Tribunal held that any provider of output service is entitled to input service credit for services availed in the course of their business activity. Consequently, the Tribunal upheld the order, dismissing the Revenue's appeal.

In this case, the primary issue revolved around the eligibility of the respondent for input service credit on various services under the CENVAT Credit Rules, 2004. The Commissioner (Appeals) allowed the credit, emphasizing the nexus of the services with the respondent's business activities. The Revenue challenged this decision, arguing that the services lacked a connection with the respondent's services. The Tribunal analyzed the case law cited by the Revenue, highlighting a judgment of the Hon'ble High Court of Bombay in a previous case. However, the Tribunal differentiated the current scenario from the case law, noting that the services in question were utilized for the activity of coal washing. By referencing the decision in the Ultratech Cement Ltd. case, the Tribunal established that input service credit is permissible for services availed in the course of business activity. Consequently, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the Revenue's appeal.