2016 (7) TMI 468 - AT - Central Excise

Entitlement to avail cenvat credit on input services - nexus with manufacturing activity - Held that - Warehouse has been used by the appellant for storage of raw material and finished goods which is a registered place for removal goods. In the circumstances, storage of goods is an integral part of manufacturing, therefore appellant is entitled to availe cenvat credit on these services. Project for Modification/ Modernisation Services, find that these services are none other than a renovation of the factory premises which is covered by the Rule 2(I) of Cenvat Credit Rules, 2004. Therefore, hold that the appellant is entitled to avail cenvat credit for project for Modification/Modernisation Services. Horticulture services,find that the appellant is compulsory required to maintain a garden in their factory to pollution control norms. Therefore, the horticulture services are directly related to the manufacturing activity by the appellant as without maintaining the garden, the appellant cannot run their factory. Therefore, hold that the appellant is entitled to avail cenvat credit for horticulture services. Courier service has been used by the appellant for various correspondences made with suppliers of the goods, without these correspondences, the appellant cannot do their business. Therefore, the courier service is an integral part of their activity, therefore, the appellant is entitled to avail cenvat credit for Courier service. Transportation service has been used by the appellant for marketing /sales, which is directly related to the manufacturing activity. Therefore, appellant is entitled to avail cenvat credit on Transportation service. - Decided in favour of assessee

Summary

Issues:
Appeal against denial of input service credit for various services pre and post 2011.

Warehouse Rent Services:
The appellant argued that warehouse usage for storing goods is integral to manufacturing, relying on a previous decision. The tribunal found storage of goods essential to manufacturing, allowing credit on these services.

Project for Modification/Modernisation Services:
The appellant contended that renovation of factory premises qualifies as an input service. The tribunal agreed, stating such services fall under Cenvat Credit Rules, allowing credit for these services.

Horticulture Services:
The appellant claimed maintaining a garden is necessary for factory operation due to pollution control norms. The tribunal agreed that horticulture services are directly related to manufacturing, allowing credit based on this necessity.

Courier Services:
The appellant argued that courier services are crucial for business correspondences with suppliers, essential for manufacturing activity. The tribunal agreed, stating courier services are integral to the business, allowing credit for these services.

Transportation Services:
The appellant asserted that transportation services are used for marketing and sales promotion directly linked to manufacturing. The tribunal agreed, allowing credit on transportation services as they are related to the manufacturing activity.

The tribunal, after hearing both parties, concluded that the appellant is entitled to avail Cenvat credit on the disputed services. The impugned order was set aside, and the appeal was allowed.