2016 (11) TMI 190 - AT - Central Excise

CENVAT credit - Input service - GTA service - Rule 2(l) of the CENVAT Credit Rules 2004 - Held that - the Hon ble High Court of Bombay in the case of CCE Nagpur Vs Ultratech Cement Ltd 2010 (10) TMI 13 - BOMBAY HIGH COURT has considered the issue at length and held that definition of input service under Rule 2(l) of CENVAT Credit Rules is very vide and covered not only services which are directly or indirectly used in or in relation to the manufacturing of final product but also after manufacture of final product - Appeal allowed partly.

Summary

Issues involved:
Denial of CENVAT credit on various input services.

Analysis:
The appellant, a manufacturer of dutiable products, availed CENVAT credit on input services under the CENVAT Credit Rules 2004. The issue arose when the appellant claimed credit on freight for transportation of goods beyond the place of removal. The show-cause notice alleged the appellant was not entitled to credit for such freight. The Additional Commissioner confirmed the demand by denying credit on various input services, which was upheld by the Commissioner. The appellant contended that the Karnataka High Court's decision in CCE Vs ABB Ltd supported their claim for credit on outward transportation of final products. The High Court's interpretation emphasized that services rendered by the manufacturer from the place of removal till the product reaches its destination fall within the definition of input service. The appellant also cited various Tribunal decisions supporting their claim for credit on different input services.

In Appeal No. 2583/2010, the denial of CENVAT credit on outward transportation of final products to the port and customers' premises was contested. The appellant argued that service tax paid on GTA service for moving goods to the port of export qualifies as an input service, citing precedents. In the remaining appeals, denial of credit on services like courier, staff welfare, printing, car rental, canteen, air travel, mobile phone, maintenance, pest control, etc., was challenged. The appellant provided Tribunal decisions and High Court rulings to support their claim for credit on these services. The High Court of Bombay's decision in CCE Nagpur Vs Ultratech Cement Ltd was highlighted to emphasize the broad scope of the definition of input service under the CENVAT Credit Rules, covering services used in the business of manufacturing final products. The Commissioner partially allowed the appeals, rejecting credit on staff welfare and printing services but upholding it for other services based on the discussed legal interpretations.

In conclusion, the appellant's appeals were partly allowed, with the denial of credit on staff welfare and printing services upheld, while credit on other input services was granted based on legal precedents and interpretations of the CENVAT Credit Rules.