2017 (12) TMI 829 - AT - Central Excise

CENVAT credit - input services - Sales Promotion Service - Employee Group Insurance service - Rent-a-cab Service - Rent of marketing office - Manpower recruitment for marketing office - Held that - in appellant s own case for the previous period Universal Power Transformers Pvt. Ltd. Versus The Commissioner of Central Excise, Bangalore 2017 (12) TMI 817 - CESTAT BANGALORE , this Tribunal held in favor of the appellant by holding that service tax paid on those impugned input services are eligible as CENVAT Credit as per the definition of input service provided in the CCR, 2004 - all these services fall in the definition of input service and the appellant has rightly taken the CENVAT credit on these impugned services - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Irregular availing of CENVAT credit on various services.
2. Rejection of appeal by Commissioner (A).
3. Interpretation of the definition of "input service" under CENVAT Credit Rules, 2004.
4. Applicability of judicial decisions on input services.

Analysis:
1. The appellant, engaged in manufacturing excisable goods, availed irregular CENVAT credit on services not qualifying as "input services" under CENVAT Credit Rules, 2004. These services included those not received by the appellant but by sister units, employee-related expenses like insurance and hiring of buses, and services rendered to marketing offices not at the factory. The adjudicating authority confirmed the demand, invoking the extended period of limitation. The Commissioner (A) rejected the appeal, leading to the present appeal.

2. The appellant argued that the impugned order failed to consider the definition of "input service" under Rule 2(l) of CENVAT Credit Rules. They contended that services denied credit had been deemed as input services by judicial decisions. The appellant presented a table listing input services and corresponding case laws supporting their claim. They highlighted that expenses on employee welfare were part of the cost of production and were undisputed by lower authorities, falling within the ambit of input services. Reference was made to a Bombay High Court decision emphasizing the connection between services and the manufacture of the final product.

3. The Tribunal noted a previous order favoring the appellant, where service tax on similar input services was deemed eligible for CENVAT Credit. Relying on the cited case laws and the broad interpretation of "input service" by various courts, the Tribunal concluded that the impugned services qualified as input services under CENVAT Credit Rules. Consequently, the Tribunal allowed the appeal, setting aside the impugned order.

Conclusion:
The Tribunal ruled in favor of the appellant, holding that the disputed services were indeed "input services" eligible for CENVAT credit. The decision was based on the interpretation of the definition of "input service" under CENVAT Credit Rules, supported by relevant case laws and precedents.