2021 (11) TMI 402 - AT - Central Excise

CENVAT Credit - input services - Courier Service - Insurance Service - Port Services - Maintenance Service - Meal Services - Telecom Services - Business Support Service - Consulting Service - Interior Decorator Services - Designing Services - LP Services - Repair Maintenance Services - Tech. Inspection Services - place of removal - HELD THAT - All the services in question are either used in or in relation to the final product or in relation to the overall business activity of the appellant. The contention of the department for denying the credit is that the service to be used not only in relation to the manufacture but also for clearance of goods from the place of removal. This is an absurd opinion of the revenue for the reason that all the services which are used for the business activity need not to be related to directly in manufacturing of the final product or clearance of the final product. The said services can be used either in the factory or even outside the factory but in relation to the business activity of the assessee. There is no dispute that all of these services in question were used for the business activity of the appellant. Reliance placed in the case of CHEMFAB ALKALIS LTD. VERSUS COMMISSIONER OF C. EX., PONDICHERRY 2009 (10) TMI 697 - CESTAT CHENNAI and UNION OF INDIA VERSUS M/S RAJASTHAN SPINNING WEAVING MILLS AND COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VERSUS M/S. LANCO INDUSTRIES LTD. 2009 (5) TMI 15 - SUPREME COURT . All the services are input services in terms of Rule 2 (l) of Cenvat credit Rules, 2004 - Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Whether the appellant is entitled to Cenvat Credit for various services under Rule 2(l) of Cenvat Credit Rules, 2004.

Analysis:
The appellant sought Cenvat Credit for services like Courier, Insurance, Port, Maintenance, Meal, Telecom, Business Support, Consulting, Interior Decoration, Designing, LP, Repair & Maintenance, and Tech Inspection services. The lower authorities denied credit, stating these services were used beyond the place of removal, not meeting the Rule 2(l) criteria. The appellant contended that these services were used either in manufacturing final products or for overall business activity, citing relevant judgments. The appellant argued that services falling under the inclusion clause of the definition of input service should qualify, even if not directly related to manufacturing. The Counsel relied on several judgments supporting this interpretation.

The Authorized Representative for the Revenue reiterated the lower authorities' findings. However, the Member (Judicial) analyzed the submissions and records. It was found that all services in question were used either in manufacturing final products or for the appellant's business activity. The Revenue's contention that services should relate to both manufacturing and clearance of goods from the place of removal was deemed unreasonable. The Member clarified that services used for business activities need not be directly linked to manufacturing or clearance. Citing additional judgments where Cenvat credit was allowed for similar services, the Member concluded that all services qualified as input services under Rule 2(l) of Cenvat Credit Rules, 2004. Consequently, the impugned order was deemed unsustainable, and the appellant was held entitled to Cenvat Credit. The appeal was allowed, with any consequential relief to be granted in accordance with the law.