2018 (1) TMI 461 - AT - Central Excise

CENVAT credit - input services - rent a cab service - mobile telephone service - telephone service used in residence and guesthouse - pest control of factory and office - Held that - there is no allegation in the show-cause notice, nor any findings in the orders of the court below that the services in question have been utilised for any particular employee. The exclusion clause under Rule 2(l) of CCR, 2004 introduced w.e.f. 01/04/2011 is not applicable in their case - appeal allowed.

Summary

Issues:
Disallowance of CENVAT credit on input services including rent a cab, mobile telephone service, telephone service used in residence and guesthouse, pest control of factory and office.

Analysis:
The appeal pertains to the disallowance of CENVAT credit on various input services availed by the appellant, including rent a cab, mobile telephone service, telephone service used in residence and guesthouse, and pest control of factory and office. The revenue contended that these services do not qualify as input services under Rule 2(l) of CENVAT Credit Rules, 2004, as they are provided outside the factory premises and not used directly or indirectly in the manufacture of final products. The period in dispute is November 2010 to August 2011.

The Order-in-Original confirmed the proposed demand along with a penalty, which was upheld by the learned Commissioner (Appeals) citing relevant case laws. However, the appellant argued that the services were received in relation to their business and thus eligible for CENVAT credit. They relied on previous Tribunal rulings that deemed similar services as allowable input services. The appellant also pointed out that the exclusion clause introduced in Rule 2(l) of CENVAT Credit Rules, 2004 from April 2011 does not apply to their case as there was no allegation that the services were provided to a particular employee.

The Tribunal, after considering the arguments, held that the exclusion clause introduced in April 2011 is not applicable in this case as there was no evidence that the services were utilized for any specific employee. Relying on previous rulings and case laws, the Tribunal concluded that all the services in question are eligible for CENVAT credit. Therefore, the appeal was allowed, the impugned order was set aside, and consequential benefits were granted in accordance with the law.