2023 (11) TMI 261 - AT - Service Tax

CENVAT Credit - input services - GTA (outward transportation) services for clearance - Commission Agent Service - Banking Financial Services - Business Auxiliary Service (Terminal Handling Services) - Courier Services - Storage Warehouse Service - Enviro Legal Consultancy Services - services in question have nexus to the manufacturing activity and overall business activity of the appellant - HELD THAT - The issue is no longer res integra as in respect of all the services, there are one or other judgments whereby it was held that all these services are admissible input service. GTA (outward transportation) services for clearance - HELD THAT - Reliance can be placed in the case of COMMISSIONER OF C. EX. CUSTOMS VERSUS PARTH POLY WOOVEN PVT. LTD. 2011 (4) TMI 975 - GUJARAT HIGH COURT where it was held that main body of the definition of term input service is wide and expansive and covers variety of services utilized by the manufacturer. By no stretch of imagination can it be stated that outward transportation service would not be a service used by the manufacturer for clearance of final products from the place of removal. Commission Agent Service - HELD THAT - Reliance can be placed in the case of M/S ESSAR STEEL INDIA LTD. VERSUS COMMISSIONER OF C. EX. SERVICE TAX, SURAT-I 2016 (4) TMI 232 - CESTAT AHMEDABAD where it was held that The definition of the 'input services' includes services used in relation to 'sales promotion' and these activities can rightly be described as sales promotion activities. Sales promotion activities undertaken at given point of time also aims at sales of goods which are to be manufactured and cleared on future. Banking Financial Services - HELD THAT - Reliance can be placed in the case of LUPIN LTD VERSUS COMMISSIONER OF CENTRAL EXCISE ST (LTU) 2014 (1) TMI 55 - CESTAT MUMBAI where it was held that There is no evidence on record to show that these services are not in relation to the goods manufactured and exported by the appellant. Business Auxiliary Service (Terminal Handling Services) - HELD THAT - Reliance can be placed in the case of LAMTUF PLASTICS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, HYDERABAD-II 2013 (12) TMI 1640 - CESTAT, BANGALORE where it was held that the credit taken up to the stage where goods have reached from the place of removal would be admissible if the same can be related to business of manufacture. Courier Services - HELD THAT - Reliance can be placed in the case of JOHN DEERE INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE III 2015 (9) TMI 261 - CESTAT MUMBAI where it was held that Service tax paid by the service provider are on the hiring charges on forklift, which were hired out to appellant for movement of materials within the factory premises. Storage Warehouse Service - HELD THAT - Reliance can be placed in the case of HUHTAMAKI PPL LTD (FORMERLY THE PAPER PRODUCTS LTD.) VERSUS C.C.E. S.T. -SURAT AND HUHTAMAKI PPL LTD (FORMERLY THE PAPER PRODUCTS LTD.) VERSUS C.C.E. S.T. -DAMAN 2021 (4) TMI 1158 - CESTAT AHMEDABAD where it was held that In the present case there is no dispute that the warehouse / godown outside the factory premises was taken on rent for storage of input which is meant for production of final product, therefore, there is a direct nexus of warehousing / storage service with the manufacturing activity of the appellant. Enviro Legal Consultancy Services - HELD THAT - Reliance can be placed in the case of M/S HEIDELBERG CEMENT INDIA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BANGALORE 2016 (9) TMI 677 - CESTAT BANGALORE where it was held that the service tax paid for providing Consultancy Services in relation to greenhouse gas emission reduction and carbon credit management service as per guidelines under the Koyoto Protocol falls under the definition of input service and the appellants are entitled to Cenvat credit and the impugned order denying the Cenvat credit on the said services on account of lack of nexus is wrong and not sustainable in law. From the above judgments against each service, it can be seen that the Tribunal has taken a view that all the above services are admissible input service and credit is available. CENVAT Credit on Commission Agent Service - HELD THAT - The issue is pending before Hon ble Gujarat High Court in the case of Essar Steel India Limited. 2016 (6) TMI 1305 - GUJARAT HIGH COURT . However there were conflicting judgments on this issue. The issue involved is of interpretation of cenvat provision. In these circumstances, since many litigations against many parties are pending before Hon ble Gujarat High Court and this Tribunal, it cannot be said that the appellant has any malafide intention for wrong availment of credit in respect of Commission Agent Service, therefore, this particular demand of cenvat credit on Commission Agency Service is not sustainable on the ground of time bar alone. The impugned order is set aside - Appeal is allowed.

Summary

Issues involved: Entitlement for cenvat credit in respect of various services.

The judgment by the Appellate Tribunal CESTAT AHMEDABAD, delivered by Hon'ble Member (Judicial) Mr. Ramesh Nair and Hon'ble Member (Technical) Mr. Raju, addressed the issue of whether the appellant is entitled to cenvat credit for services including GTA (outward transportation), Commission Agent Service, Banking & Financial Services, Business Auxiliary Service (Terminal Handling Services), Courier Services, Storage & Warehouse Service, and Enviro Legal Consultancy Services. The appellant argued that these services have been deemed admissible input services in previous judgments. Specifically, regarding Commission Agent Service, the appellant highlighted conflicts in judgments and asserted that there was no suppression of facts, rendering the demand for cenvat credit not sustainable due to limitation. The authorized representative for the respondent reiterated the findings of the impugned order.

The Tribunal examined whether the services in question were connected to the manufacturing and overall business activities of the appellant. It was noted that previous judgments had consistently allowed cenvat credit for these services, as evidenced by a chart listing relevant cases for each service category. Despite the issue of cenvat credit for Commission Agent Service being pending before the Hon'ble Gujarat High Court, the Tribunal found that conflicting judgments and ongoing litigations indicated no malafide intention on the part of the appellant. Consequently, the demand for cenvat credit on Commission Agent Service was deemed unsustainable on the grounds of time bar. The impugned order was set aside, and the appeal was allowed. The judgment was pronounced in open court on 03.11.2023.