2024 (3) TMI 75 - HC - Service Tax

Cenvat Credit - input service - Air Travel Agent Service - Catering Service - CHA Service (Export) - Courier Service - Event Management Service - Group Term Insurance Service - Hotel Service - Rent a Cab/Car Service - Repair and Maintenance Service (Car) - Tour and Travel Service - Construction Service - HELD THAT - In COMMISSIONER CENTRAL EXCISE COMMISSIONERATE, DELHI-III VERSUS M/S BELLSONICA AUTO COMPONENTS INDIA P. LTD. 2015 (7) TMI 930 - PUNJAB HARYANA HIGH COURT it was held that service tax paid on the civil work and on lease rentals was admissible once the land which was taken on lease to construct the factory was being used by the manufacturer even indirectly by the manufacturer of the final products namely metal sheets and the benefit could not be denied - the findings of the Tribunal denying the said benefit had been set aside in the said case, which would be directly applicable to the present case, which was also for the period from 2007 to 2010. It was also noticed the amendment made in the year 2011 to Rule 2(l) of the 2004 Rules went on to show that services were excluded from the definition of input service thereafter and if the services were not covered by the said rule, it would not have been necessary to introduce the amendment. Therefore, it was held that the setting up of a factory premises providing for output services would fall into the definition of input service and the amendment was not retrospective and not applicable. In COMMISSIONER OF CENTRAL EXCISE DELHI-III VERSUS M/S MARUTI SUZUKI INDIA LTD. 2016 (11) TMI 237 - PUNJAB AND HARYANA HIGH COURT , the Division Bench granted the benefit under Mandap Keeping Service and Rent a Cab Service and while relying upon the judgment passed in M/S. COCA COLA INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, PUNE-III 2009 (8) TMI 50 - BOMBAY HIGH COURT and definition of input service as such was considered by holding that same should be ordinary allowed as long as a connection would be there between input stage goods and service and the interpretation of the revenue would be against the Cenvat credit scheme. Thus, no substantial question of law arises as contended by counsel for the appellant - The appeal stands dismissed, accordingly.

Summary

Issues Involved:
The appeal filed under Section 35 (G) of the Central Excise Act, 1944 against the order of the Customs, Excise & Service Tax Appellate Tribunal granting Cenvat credit on various services denied by the authorities below.

Issue 1: Benefit of Cenvat Credit on Various Services
The Tribunal granted Cenvat credit on services like Air Travel Agent Service, Catering Service, CHA Service (Export), Courier Service, Event Management Service, Group Term Insurance Service, Hotel Service, Rent a Cab/Car Service, Repair and Maintenance Service (Car), Tour and Travel Service, and Construction Service, which had been denied by the lower authorities. The Tribunal's reasoning was based on the judgment in Commissioner of Central Excise Vs. Ultratech Cement Ltd., 2010, which held that if a service is availed in the course of business, the entitlement to Cenvat credit exists. The only exception was for catering service and rent a cab service, subject to recovery verification by the adjudicating authority.

Issue 2: Construction Service and Cenvat Credit
The appellant argued that the construction service could not be directly or indirectly related to the manufacture of final products. The respondent relied on the judgment in Commissioner of Central Excise Vs. Bellsonica Auto Components India P. Ltd., 2015, where it was held that services contributing directly or indirectly to the manufacture of final products are eligible for Cenvat credit. The Commissioner's reasoning emphasized that services should not remotely contribute to manufacturing, drawing a line to avoid undue extension of the definition of input services.

Issue 3: Interpretation of Rule 2(l) of Cenvat Credit Rules
The discussion revolved around Section 2(l) of the unamended 2004 Rules defining "input service" as any service used directly or indirectly in or in relation to the manufacture of final products. The case involved a factory constructed for manufacturing final products, and the dispute was whether the construction service qualified as an input service under this rule. The judgment in Bellsonica Auto Components clarified that services used in setting up a factory are covered under the definition of input services, allowing for Cenvat credit.

Outcome:
The Tribunal's denial of Cenvat credit was set aside based on precedents and interpretations of the Cenvat Credit Rules. The Court found no substantial question of law and dismissed the appeal accordingly.