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2017 (2) TMI 1063 - AT - Central ExciseCENVAT credit - input services - insurance on plant & machinery - Company vehicle insurance - Repair & Maintenance, compliance of Regulatory bodies - Inspection and Testing - erection & Commissioning of Fire equipment - Rent-a-cab service for the employees - Held that - most of the services on which credit availed are held to be Input Service as defined under Rule 2(l) of CCR 2004, in the various decisions, hence eligible to Cenvat Credit. Repair and Maintenance Service - Held that - service being undertaken at the residential premises is not admissible to credit in view of the judgment of the Hon ble Gujarat High Court in the case of CC Vs Gujarat Heavy Chemicals 2011 (5) TMI 132 - GUJARAT HIGH COURT . Since, major portion of the credit availed is held to be admissible, penalty confirmed on the Appellant is set aside. Appeal disposed off - decided partly in favor of appellants.
Issues:
1. Appeal against OIA SRP 152 153 VAPI-2013-14 passed by Commissioner (Appeal) 2. Recovery of CENVAT Credit on various services 3. Definition of 'input service' under Rule 2(l) of CCR, 2004 4. Admissibility of credit on different services 5. Applicability of penalties Analysis: 1. The appeal was filed against the OIA SRP 152 153 VAPI-2013-14 passed by the Commissioner (Appeal), Central Excise, Customs, and Service Tax-VAPI. The appellant, engaged in manufacturing HDPE, PP Bags, received a show cause notice for the recovery of CENVAT Credit of ?80,841 on various services. The demand was confirmed with penalties, which led to the filing of appeals by the appellants before the Ld Commissioner (Appeal), who partly allowed the appeals by reducing penalties. The present appeal was filed by the assessee-company. 2. The issue revolved around the recovery of CENVAT Credit on various services like insurance, repair, maintenance, compliance with regulatory bodies, inspection, testing, etc. The contention was that these services did not satisfy the definition of 'input service' as per Rule 2(l) of CCR, 2004. The appellant argued that the services should be considered 'input service' based on precedents from judgments like Oudh Sugar Mills Ltd. Vs. CCE, Hindustan Zinc Ltd. Vs. CCE, Valco Industries Ltd. Vs. CCE, DSCL Sugar Vs. Commissioner of Central Excise, KPMG, Utopia India Pvt Ltd, and Principal Commissioner Vs. Essar Oil Ltd. 3. The key aspect was determining the admissibility of credit on different services under the definition of 'input service.' The Ld Advocate for the Appellant argued that most of the services availed were considered 'input service' in previous judgments, making them eligible for CENVAT Credit. However, the Revenue contended that credit availed on services used in residential premises was not eligible based on a specific case law. 4. The judgment analyzed the services on which credit was availed and held that most of them qualified as 'input service' under Rule 2(l) of Cenvat Credit Rules 2004, based on previous decisions. The credit availed on repair and maintenance services undertaken at residential premises was deemed inadmissible in line with a judgment of the Gujarat High Court. Consequently, the CENVAT Credit amount related to repair and maintenance at residential premises was not allowed, while the remaining credit was considered admissible. As a result, the penalty imposed on the Appellant was set aside, and the appeal was partly allowed based on the admissibility of the credit. 5. The judgment provided a detailed analysis of the services in question, their classification as 'input service,' and the implications on the admissibility of CENVAT Credit. By referencing relevant case laws and legal provisions, the Tribunal made a nuanced decision regarding the eligibility of credit and the associated penalties, ultimately providing clarity on the matter for the appellant-company.
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