2016 (11) TMI 860 - AT - Central Excise

CENVAT credit - inputs and input services - LPG cylinders - telecom services - marketing services - maintenance/repair services - whether the LPG cylinders used for transporting finished goods from factory to store room in forklifts is eligible for credit is decided in the case of Bajaj Auto Ltd. 2010 (12) TMI 979 - CESTAT, MUMBAI - Held that - it was held in the case that the credit on LPG cylinders used for running canteen, which was maintained for workers under the Factory Act, 1948 was held to be eligible. In the present case, the LPG cylinders were used to function the forklifts in order to facilitate movement of goods within the factory. Following the judgment I hold that credit on LPG cylinders is admissible. Telecom services - marketing services - maintenance/repair services - Held that - these services fall within the inclusive part of the definition. The original authority has denied the credit stating that, maintenance and repair services were availed in respect of vendors premises. On perusal of the definition of input service it can be seen that the marketing/sales promotion services fall within the inclusive part of the definition. The same has been considered and analysed in the judgment referred in M/s Hindustan Coca Cola Beverages (P) Ltd., 2010 (4) TMI 323 - CESTAT, BANGALORE . Disallowance of credit on inputs as well as input services is unjustified - appeal allowed.

Summary

Issues:
1. Admissibility of CENVAT Credit on LPG cylinders used for transportation.
2. Eligibility of input services credit on telecom, marketing, and maintenance/repair services.

Analysis:
1. The appellants, engaged in manufacturing Aerated and Carbonated Water, availed CENVAT Credit on service tax paid on input services and duty paid on inputs. The dispute arose regarding the admissibility of credit on LPG cylinders used for transporting goods within the factory. The department contended that LPG cylinders did not qualify as inputs, leading to the denial of credit. The appellant also availed input services like telecom, marketing, and maintenance/repair services, which were challenged for not meeting the criteria of input services. The original authority and Commissioner (Appeals) upheld the denial of credit, prompting the appeal.

2. The appellant's counsel argued that the credit on LPG cylinders should be allowed based on a precedent involving Bajaj Auto Ltd., where similar credit was deemed admissible. The Tribunal held that since the LPG cylinders were used to operate forklifts for internal goods movement, the credit was justified. Regarding the input services credit denial, the counsel referenced a case involving Hindustan Coca Cola Beverages, emphasizing that services related to marketing and maintenance fell within the definition of inputs. The department supported the original order findings.

3. After considering the arguments, the Tribunal ruled in favor of the appellant. It held that the credit on LPG cylinders was admissible as per the precedent cited, as they facilitated internal goods movement within the factory. Additionally, the input services, including marketing and maintenance, were deemed eligible based on the inclusive definition of inputs. The Tribunal found the denial of credit unjustified and set aside the impugned order, allowing the appeal with consequential reliefs.

This detailed analysis highlights the key legal arguments, precedents cited, and the Tribunal's reasoning behind allowing the CENVAT Credit on LPG cylinders and input services, ultimately overturning the original denial of credit.