2019 (5) TMI 251 - AT - Central Excise

CENVAT Credit - input services - Event Management Services - HELD THAT - The period involved is prior to 01.04.2011 and during that period, the definition of input services had a wide ambit as it included the words activities relating to business . It is very much clear that these activities are related to the business of manufacture as the event is for promotion of their finished product - Credit allowed. CENVAT Credit - input services - Housekeeping Services - HELD THAT - It is indeed necessary for the appellant to keep the premises clean and hygiene. Therefore, credit availed on these services, which is disallowed by the department stating that they do not have any nexus with the manufacturing activity is incorrect - credit allowed. CENVAT Credit - input services - Renting of Immovable Property, which was used for marketing office - HELD THAT - For availing input services, it is not necessary that the input services have to be availed within the factory itself. Various input services, which are enumerated in the definition are in the nature that they cannot be availed within the factory alone - the credit availed on service tax paid on rent for marketing office, which are used by the appellant for marketing of their finished products is eligible - credit allowed. CENVAT Credit - input services - Business Auxiliary Services - HELD THAT - It cannot be disputed that the appellant being a factory has to maintain these equipments for ensuring the safety of the premises as well as for the employees working therein - the disallowance of credit on BAS is unjustified and credit is eligible - credit allowed. CENVAT Credit - input services - Brokerage Commission - HELD THAT - Such officers are essential for marketing of finished products. The service tax paid on Brokerage Commission for real estate brokers is eligible for credit - Credit allowed. CENVAT Credit - input services - Clearing and Forwarding Agency Services - HELD THAT - This issue is required to be remanded to the adjudicating authority, who is directed to determine the place of removal and then decided the eligibility of credit. CENVAT Credit - input services - Auctioneering Services - HELD THAT - It is seen that the appellants had availed the services of auctioneers in order to avail the services of Rent-a-Cab Service. Taking note of the fact that the appellant has availed the services as well as paid service tax in respect of such services which were used for the business of manufacture, the credit is eligible. CENVAT Credit - input services - Cleaning services - HELD THAT - The final products manufactured by the appellant is intended for human consumption. Therefore, the factory, depots as well as marketing offices have to be kept free of pest . Therefore, the credit availed on these services are eligible for credit - credit allowed. CENVAT Credit - input services - Man-power Supply and Recruitment Services - HELD THAT - The man-power was used by them for loading and unloading activities at the depots as well as marketing offices. Since the man-power is used for loading and unloading of final products, the disallowance of credit is incorrect - The appellant is eligible for credit on these services. Appeal allowed in part and part matter on remand.

Summary

Issues Involved:
1. Credit availed on Event Management Services
2. Credit availed on Housekeeping Services
3. Credit availed on Renting of Immovable Property Services
4. Credit availed on Business Auxiliary Services
5. Credit availed on Brokerage Commission
6. Credit availed on Clearing and Forwarding Agency Services
7. Credit availed on Auctioneering Services
8. Credit availed on Cleaning Services
9. Credit availed on Supply of Man-power Services

Detailed Analysis:

1. Credit availed on Event Management Services:
The appellant argued that Event Management Services were used for promoting the sale of their finished product and should be eligible for credit as it falls under "activities relating to business" prior to 01.04.2011. The Tribunal agreed, noting that the period in question had a broad definition of "input services" and that the event was for the promotion of their finished product. The Tribunal allowed the credit on this head.

2. Credit availed on Housekeeping Services:
The appellant contended that Housekeeping Services were necessary for maintaining cleanliness and hygiene at their factory, marketing office, and depots. The Tribunal found this argument valid, stating that keeping premises clean is essential and thus the credit on Housekeeping Services is eligible.

3. Credit availed on Renting of Immovable Property Services:
The appellant used rented office space for marketing their finished products and argued that this should be eligible for credit. The Tribunal agreed, stating that input services do not need to be availed within the factory premises alone and allowed the credit on Renting of Immovable Property Services.

4. Credit availed on Business Auxiliary Services:
The appellant used Business Auxiliary Services for training and maintenance of fire safety equipment. The Tribunal found that maintaining such equipment is crucial for factory safety and allowed the credit on Business Auxiliary Services.

5. Credit availed on Brokerage Commission:
The appellant engaged real estate brokers to find suitable marketing office space and argued that the commission paid should be eligible for credit. The Tribunal agreed, noting that such offices are essential for marketing finished products and allowed the credit on Brokerage Commission.

6. Credit availed on Clearing and Forwarding Agency Services:
The appellant argued that the place of removal is the buyer’s premises as the transactions are on F.O.R. basis. The Tribunal noted that this needs verification and remanded the issue to the adjudicating authority to determine the place of removal and reconsider the eligibility of credit.

7. Credit availed on Auctioneering Services:
The appellant used Auctioneering Services to avail Rent-a-Cab Service for their business. The Tribunal found that these services were used for the business of manufacture and allowed the credit on Auctioneering Services.

8. Credit availed on Cleaning Services:
The appellant used Cleaning Services to keep their premises pest-free, which is essential as their products are for human consumption. The Tribunal agreed that maintaining pest-free premises is necessary and allowed the credit on Cleaning Services.

9. Credit availed on Supply of Man-power Services:
The appellant used Supply of Man-power Services for loading and unloading activities at their depots and marketing offices. The Tribunal found that these services were directly related to their business activities and allowed the credit on Supply of Man-power Services.

Conclusion:
The Tribunal allowed the credit on all services except for Clearing and Forwarding Agency Services, which was remanded to the adjudicating authority for further verification. The appeal was partly allowed and partly remanded with consequential reliefs, if any.