2016 (6) TMI 320 - AT - Service Tax

Admissibility of Cenvat credit - Services regarding valuation of fixed assets - No evidence furnished regarding services availed pertaining to manufacturing unit or not - Held that - as per Rule 2 (l) of the Cenvat Credit Rules, 2004, accounts relating to business such as accounting, financing will be covered within the definition of input service. Accordingly, valuation of the fixed assets got done by the Appellant with respect to manufacturing activities will have to be considered as an activity in relation to the manufacture of the goods. Cenvat Credit of such services will thus be admissible to the Appellant. - Decided in favour of appellant with consequential relief

Summary

Issues:
Admissibility of Cenvat Credit on services related to valuation of fixed assets for manufacturing activity.

Analysis:
The Appellant filed an Appeal against the Order-in-Appeal disallowing Cenvat Credit of ?1,04,040 related to services for valuation of fixed assets, as deemed unrelated to manufacturing under Rule 2(l) of the Cenvat Credit Rules, 2004. The Appellant's representative argued that such services are integral to manufacturing activities, falling under accounting, auditing, and financing activities. The Adjudicating Authority had denied credit due to lack of evidence on asset relevance to manufacturing. The Revenue's representative defended the lower authorities' decisions.

The Tribunal examined the issue of Cenvat Credit admissibility for services on fixed asset valuation for manufacturing. Referring to Rule 2(l) of CCR, defining input service broadly to include business-related activities like accounting and financing, the Tribunal concluded that fixed asset valuation for manufacturing is an activity related to goods production. Thus, the Appellant's Cenvat Credit claim was deemed admissible, overturning the First Appellate Authority's decision.

In light of the definition of input service covering business activities like accounting and financing, the Tribunal held that valuation of fixed assets for manufacturing qualifies as an activity related to goods production. Consequently, the Appellant's appeal was allowed, and any consequential relief was granted.