2015 (9) TMI 1223 - AT - Central Excise

Denial of CENVAT Credit - input services - Services of Pandal and Shamiana, tour operator and construction services do not qualify as input services as per Rule 2(l) of the Cenvat Credit Rules 2004 - Held that - It is not disputed by the Revenue that the services in question were not availed by the appellant in the course of their business of manufacturing of excisable goods. Therefore, I hold that Cenvat Credit to the appellant cannot be denied. On the one hand they are claiming tour operator services and on the other hand they are claiming construction service of residential colony. From the facts of the case and adjudication by the lower authorities it is not disputed that appellant has not constructed residential colony and appellant has not used tour operator services for carrying their employees from their residence to the factory and factory to residence. When these facts are admitted facts then claim of the appellant is entertainable and appellant is entitled to take Cenvat Credit. Without going into the case laws relied upon by the Ld. Counsel for appellant as the decision of Ultratech Cement Ltd. (2010 (10) TMI 13 - BOMBAY HIGH COURT) covers the entitlement of Cenvat Credit. Therefore, I hold that appellant is entitled to take Cenvat Credit. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Denial of input service credit on various services.

Analysis:
The appellants appealed against orders denying Cenvat Credit on input services including Pandal and Shamiana service, tour operator services, and construction services. The denial was based on the premise that these services did not qualify as input services under the Cenvat Credit Rules 2004. The appellant contended that they were entitled to Cenvat Credit for Pandal, Shamiana, and tour operator services, arguing that the denial was based on the lack of documents showing inclusion of service costs in the final product's assessable value, a requirement not raised in the show cause notice. Regarding construction services, the appellant asserted that these were integral to their manufacturing activity, providing accommodation for employees to enhance efficiency. They cited precedents supporting their claim, including tribunal decisions and High Court rulings. The appellant also challenged the timeliness of the show cause notice, invoking precedents to argue against the use of the extended limitation period.

The opposing party argued that the denial was not related to valuation but to the lack of documentation verifying inclusion of service costs in the final product's assessable value, a crucial requirement for Cenvat Credit eligibility. Regarding construction services, the opposing party contested the appellant's claims, pointing out inconsistencies between using tour operator services for employee transport and constructing a residential colony due to the factory's remote location. It was argued that constructing a residential colony was a capital expenditure, making the appellant ineligible for Cenvat Credit. The opposing party supported the lower authorities' decisions.

The Tribunal considered the arguments and relevant precedents. Referring to a Bombay High Court case, it held that any service availed by a manufacturer in the course of business is eligible for Cenvat Credit. Since the services in question were used in the manufacturing of excisable goods, the appellant was entitled to Cenvat Credit. The Tribunal found no merit in the opposing party's contentions, as it was established that the appellant had indeed used the services in question for the intended purposes. Given the admitted facts and lack of dispute on key points, the Tribunal ruled in favor of the appellant, allowing the appeals and setting aside the impugned orders.