2019 (4) TMI 927 - AT - Central Excise

CENVAT Credit - input services - Repair of vehicles - Business Support service - Event Management Services - Cargo Handling service - Supply of Tangible Goods service - Works Contract Service - Hotel, Inn, Guest house, club or campsite service - Real Estate Agent Service - Convention Services - Association Membership Service - Information Technology Software Service - CHA Services for export - Renting of immovable property service - CHA (Import) - Video tape production service - Legal Consultancy Service - Public Relation Service - Company Secretary Service. Repair of vehicles - HELD THAT - The said service has been used by the assessee for providing free after sale service to customers which is the condition of sale of the assessee. As there is condition to provide free after sale service to the customers during warranty period, therefore, the assessee is entitled to avail credit on the said service - Credit allowed. Business Support service - HELD THAT - These services have been availed by the assessee for disposal of hazardous waste, storage of records, management and administrative support to maintain international telecommunication network and interpreter of Japanese language - the disposal of hazardous waste is a statutory requirement for undertaking manufacturing activity by the assessee. Therefore, the assessee is entitled to avail credit thereon - In respect of storage of record, this activity is relating to the manufacturing activity, and is in relation to accounting, therefore, the assessee is entitled to avail credit - With regard to the international telecommunication network, and interpreter of Japanese language, we find that the said services are required for availing technical assistance from the Japanese engineer otherwise the assessee is not able to understand conversion made between them and Japanese technician - Credit allowed. Event Management Services - HELD THAT - The assessee has launched new models of their products, namely, Dream Yuga and for launching new product or organizing event of sale promotion are part of the sale of the products which is directly related to manufacturing activity. It is the assessee, who has to decide how the event is to be organized for promotion of their sale or launching new product - Credit allowed. Cargo Handling Services - HELD THAT - The said service has been used by the assessee in their own factory for air lifting of their goods inside the factory. Therefore, the assessee is entitled to avail credit on input service - Credit allowed. Supply of Tangible Goods Service - HELD THAT - The senior officials are engaged in the activity of manufacturing of the assessee and sale promotion thereof. In fact, these official have been provided the car in terms of their employment agreement and these employees are engaged in the purchase and sale of the inputs/final goods of the assessee. Therefore, these services are input services and the assessee is entitled to avail credit thereof - Credit allowed. Works Contract Service - HELD THAT - These services used for repair of building and machine and these are not used for construction of new building but the same is used for repair of building and machine and these services do qualify as input service - Credit allowed. Hotel, Inn, Guest house, club or campsite service - HELD THAT - The said services have been used by the assessee for official purposes by employees/foreign engineers for business promotion, customer support and for foreign engineer, whose service has been availed for technical assistance in their manufacturing activity - Credit allowed. Real Estate Agent Service - HELD THAT - The services used by the senior officials of Honda, Japan who visit the company for legitimate business purposes and rest houses are taken on lease for their stay. Therefore the services used by the assessee for the purpose of sales promotion, customer support, directly qualify as input service - Credit allowed. Convention Service - HELD THAT - The conventions arranged for business or marketing of the goods manufactured by the assessee. Therefore, said activity is having direct nexus with the manufacturing activity of the assessee - Credit allowed. Association Membership Service - HELD THAT - The said service has been availed by the assessee for approval of products etc. at a concessional rate and updated information about technological development - Credit allowed. Information Technology Software Service - HELD THAT - The said services are in relation to software solution, creation of web space, bandwidth charges and uploading of advertisement etc. are directly or indirectly in relation to manufacture of final products - Credit allowed. CHA Services for export - HELD THAT - CHA service has been availed upto port of export and any service availed upto place of removal i.e. port of export (in case of export) is entitled as input service - Credit allowed. Renting of immovable property service - HELD THAT - The regional offices are used for marketing of the product of the assessee, therefore, the said service is having nexus with the manufacturing activity of the assessee - credit allowed. CHA (Import) services - HELD THAT - The said service used for procurement of inputs and without procurement of inputs, no manufacturing activity can take place. Therefore, the said service has direct nexus with the manufacturing activity of the assessee - credit allowed. Video tape production service - HELD THAT - The said service used for advertising and sales promotion which is directly covered within the definition of input service under Rule 2(l) of Cenvat Credit Rules, 2004 - Credit allowed. Legal Consultancy Service - HELD THAT - The assessee has availed the legal consultancy service from the legal consultant in relation to company law and environmental law, which is essential for their manufacturing process with regard to how to proceed with business - Credit allowed. Public Relation Service - HELD THAT - Since the services has been used for advertisement and sales promotion. Without launching new product, the sale activity cannot take place - Credit allowed. Company Secretary Service - HELD THAT - The said service has been availed by the assessee to discharge statutory obligations to maintain proper records. Therefore, the said has formed part of their manufacturing activity, which is directly or indirectly related to the manufacturing of final product of the assessee - Credit allowed. Appeal allowed in toto.

Summary

Issues:
Appeal against the impugned order regarding the eligibility of Cenvat credit on various input services.

Repair of vehicles:
The dispute revolves around the denial of credit on services related to repair of vehicles used for providing free after-sale service. The Tribunal held that such services are essential for fulfilling the condition of providing free after-sale service during the warranty period, making the assessee eligible for credit.

Business Support service:
The controversy concerns the denial of credit on services like disposal of hazardous waste, storage of records, and interpreter services. The Tribunal ruled in favor of the assessee, stating that these services are directly linked to manufacturing activities, making the assessee entitled to avail credit.

Event Management Services:
The issue involves the denial of credit on event management services used for promoting sales and launching new product models. The Tribunal held that organizing events for sales promotion and launching new products directly relates to manufacturing activities, allowing the assessee to claim credit.

Cargo Handling Service:
The dispute pertains to the denial of credit on cargo handling services used within the assessee's factory. The Tribunal concluded that since the services were utilized for internal air lifting of goods, the assessee is entitled to avail credit on such input services.

Supply of Tangible Goods for use:
The controversy surrounds charges paid for DG sets and cars provided to senior officials. The Tribunal held that these services are indeed input services as the senior officials are engaged in manufacturing and sales promotion activities, making the assessee eligible for credit.

Work Contract Service:
The issue involves the denial of credit on services used for repair of building and machinery. The Tribunal allowed the credit, stating that these services qualify as input services since they were utilized for repair purposes, not for new construction.

Hotel, Inn, Guest house, etc.:
The dispute concerns the denial of credit on services used for official stays of foreign engineers and employees. The Tribunal ruled in favor of the assessee, stating that these services were utilized for business promotion and customer support, making them eligible for credit.

Real Estate Agent Service:
The controversy involves the denial of credit on services for leasing office spaces. The Tribunal held that such services were used for legitimate business purposes, like sales promotion and customer support, making the assessee entitled to claim credit.

Convention Services:
The issue revolves around denying credit on services for conducting seminars and conventions. The Tribunal ruled in favor of the assessee, stating that such activities directly relate to business and marketing of manufactured goods, allowing the assessee to avail credit.

Association Membership Service:
The dispute pertains to the denial of credit on membership fees paid to an engineering council. The Tribunal allowed the credit, stating that the services availed were for product approvals and technological information, directly benefiting the manufacturing process.

Information Technology Software Service:
The controversy involves the denial of credit on software services. The Tribunal held that such services, including web creation and advertisement uploading, are directly related to manufacturing activities, making the assessee eligible for credit.

CHA Services for export:
The issue concerns the denial of credit on services used for exporting goods. The Tribunal ruled in favor of the assessee, stating that services availed up to the port of export qualify as input services, allowing the assessee to claim credit.

Renting of immovable property service:
The dispute involves the denial of credit on renting regional offices. The Tribunal held that since these offices were used for marketing and advertisement, they directly relate to manufacturing activities, making the assessee eligible for credit.

CHA (Import):
The controversy pertains to the denial of credit on CHA services for importing raw materials. The Tribunal allowed the credit, stating that such services have a direct nexus with the manufacturing of final products.

Video tape production service:
The issue involves the denial of credit on services used for advertising and sales promotion. The Tribunal ruled in favor of the assessee, stating that such services directly contribute to sales promotion, making the assessee eligible for credit.

Legal Consultancy Service:
The dispute concerns the denial of credit on legal consultancy services. The Tribunal allowed the credit, stating that legal advice on company and environmental laws is essential for the manufacturing process.

Public Relation Service:
The controversy involves the denial of credit on services for organizing press conferences. The Tribunal ruled in favor of the assessee, stating that such services directly contribute to advertisement and sales promotion, making the assessee eligible for credit.

Company Secretary Service:
The issue pertains to the denial of credit on services for maintaining company records. The Tribunal allowed the credit, stating that such services are essential for statutory compliance and are directly related to the manufacturing activity.

In conclusion, the Tribunal allowed the appeal filed by the assessee and dismissed the appeal filed by the Revenue, holding that the impugned order denying credit was not sustainable.