2018 (10) TMI 1411 - AT - Central Excise

CENVAT Credit - input services - rent a cab service - courier service - Hotel Accommodation Services - denial on account of nexus - Held that - The services of Rent a cab and Hotel Accommodation are services are used for overall business activities of the appellant. The only business carried out by the appellant is manufacturing of excisable goods and sale thereof. Therefore, these services are actually related to the manufacturing activities of the appellant - credit allowed. Courier service - Held that - As per Hon ble Supreme Court judgment in the case of Ultratech Cement Ltd. 2018 (2) TMI 117 - SUPREME COURT OF INDIA credit is admissible only in respect of services used for the removal of goods upto the place of removal - From the perusal of the records, it is not clear that whether all the courier services is used for removal of goods - As per the submission of Ld. Counsel, the courier service is used for sending documents or inward transportations as well as for outward transportation. Time Limitation - Held that - he issue of service used for removal of goods there was a serious doubt. There were various conflicting judgments on the said issue - malafied intention cannot be attributed to the appellant. Therefore, the demand for extended period is hit by limitation - For the normal period in respect of courier services the demand will sustain only in respect of courier services which is used for removal of excisable goods beyond the place of removal. The demand in respect of CENVAT credit on Rent a Cab service, Hotel Accommodation and demand of extended period in respect of courier service is set aside and for remaining portion, the matter is remanded for requantification to the Adjudicating Authority - appeal allowed by way of remand.

Summary

Issues Involved:
Entitlement to CENVAT credit for input services - rent a cab service, courier service, and hotel accommodation services.

Analysis:

1. Rent a Cab Service:
The appellant argued that all services were used for the overall business operation, particularly in the manufacture of excisable goods. Rent a cab service was utilized for transportation related to business activities, not personal consumption. Citing various judgments, the appellant contended that CENVAT credit should be allowed for such services. The demand invoked the extended period, but the appellant relied on a board's circular supporting their entitlement to the credit, making the demand unsustainable.

2. Hotel Accommodation Service:
Similarly, hotel accommodation services were used for official purposes, such as lodging staff and directors for official duties. The appellant argued that these services were essential for business activities and should be eligible for CENVAT credit.

3. Courier Services:
The issue of courier services was contentious due to conflicting judgments. The appellant argued that the services were used for sending goods, documents, and parcels, essential for business. The demand was challenged based on the ambiguity surrounding services used for removal of goods and conflicting judgments, eventually resolved by the Supreme Court in a specific case.

4. Judgment Analysis:
The tribunal considered the submissions from both sides and reviewed relevant records. It was established that rent a cab and hotel accommodation services were directly related to the manufacturing activities of the company, making them eligible for CENVAT credit based on precedent judgments. However, the admissibility of credit for courier services was contingent on whether they were used for removal of goods beyond the place of removal. Due to ambiguity and conflicting judgments, the demand for the extended period was deemed time-barred and set aside. The penalty imposed was also revoked due to the absence of malicious intent. The appeal was disposed of accordingly, with a remand for requantification of the demand for courier services beyond the place of removal.

This detailed analysis of the judgment highlights the arguments presented, legal precedents cited, and the tribunal's decision on the entitlement to CENVAT credit for the specified input services.