2024 (6) TMI 758 - AT - Central Excise

CENVAT Credit - input services - Examination of factual submissions and judicial determinations - HELD THAT - The issues relating to admissibility of Cenvat credit in respect of input services is no more open to debate, inasmuch as the legal issues governing such issues have been settled finally by the various judgements of the higher judicial forum is follows. There are judgments of the Hon ble High Court of Bombay with particular reference to M/S. COCA COLA INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, PUNE-III 2009 (8) TMI 50 - BOMBAY HIGH COURT , Commissioner of Central Excise, Nagpur Vs. Ultra Tech Cement Ltd., 2010 (10) TMI 13 - BOMBAY HIGH COURT and the judgement of the Hon ble Supreme Court in the case of State of Karnataka Vs. Shreyas Paper Pvt. Ltd. 2006 (1) TMI 243 - SUPREME COURT in affirming the view taken by the Hon ble Karnataka High Court 1999 (9) TMI 932 - KARNATAKA HIGH COURT . Considering the fact that the Coordinate Division Bench of the Tribunal in its Final order NITIN CASTINGS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE THANE 2023 (6) TMI 1392 - CESTAT MUMBAI had remanded the case back to the original adjudicating authority to decide the matter afresh upon consideration of the factual submissions made by the appellant and the relevance of judicial determination on each of the input service, it is found that the issues covered in the present case are being same except for different period in the subsequent year, the ends of justice would be met, if the present appeal is also allowed to be decided by the original adjudicating authority, for a decision afresh in de nova proceedings. There are no substance in the impugned order in denying the Cenvat credit on input services without proper examination in the context of various decisions passed by the Hon ble High Court of Bombay and Hon ble Supreme Court. Therefore, the impugned order is set aside and the matter is remanded back to the original adjudicating authority for consideration of the various submissions made by the appellant in the appeal paper book. Appeal allowed by way of remand.

Summary

Issues Involved:
1. Eligibility of various input services for Cenvat credit.
2. Interpretation of Rule 2(l) of the Cenvat Credit Rules, 2004.
3. Admissibility of Cenvat credit on input services used beyond the place of removal.
4. Examination of factual submissions and judicial precedents.

Detailed Analysis:

1. Eligibility of Various Input Services for Cenvat Credit:
The primary issue revolves around whether the input services utilized by the appellant qualify for Cenvat credit under Rule 2(l) of the Cenvat Credit Rules, 2004. The services in question include renting of property, security, telephone, inspection/testing, courier, repair and maintenance, transport, banking, labor charges on job work, insurance, professional fees, and clearing and forwarding services. The Commissioner (Appeals) upheld the original authority's decision to deny Cenvat credit for most services, except telephone, inspection/testing, and banking services, which were deemed eligible.

2. Interpretation of Rule 2(l) of the Cenvat Credit Rules, 2004:
The appellant argued that the definition of input services is broad and inclusive, encompassing services used "directly or indirectly, in or in relation to" the manufacture of final products. The Department contended that many services did not qualify as input services under Rule 2(l) because they were not used in or in relation to the manufacture of final products. The Tribunal noted that previous judgments, including those by the Bombay High Court and the Supreme Court, had settled the legal issues governing the admissibility of Cenvat credit for specific services.

3. Admissibility of Cenvat Credit on Input Services Used Beyond the Place of Removal:
The Tribunal examined whether services used beyond the place of removal, such as banking and clearing and forwarding services, qualify for Cenvat credit. The appellant contended that for exports, the place of removal extends to the port of export. However, the Tribunal referred to the definition of "place of removal" and previous judgments, which did not support the appellant's contention. The Tribunal concluded that services used beyond the place of removal do not qualify for Cenvat credit.

4. Examination of Factual Submissions and Judicial Precedents:
The Tribunal found that the adjudicating authority had inadequately addressed the factual submissions and judicial precedents presented by the appellant. The Tribunal emphasized the need for a detailed examination of each service's eligibility for Cenvat credit based on factual submissions and relevant judicial determinations. Consequently, the Tribunal set aside the impugned order and remanded the matter back to the original adjudicating authority for a fresh decision, considering the appellant's submissions and judicial precedents.

Conclusion:
The Tribunal concluded that the impugned order dated 16.01.2019, denying Cenvat credit on input services, lacked proper examination in the context of various judicial decisions. The matter was remanded back to the original adjudicating authority for a fresh decision within six months, with an opportunity for the appellant to present their case in a personal hearing. The appeal was allowed in favor of the appellant by way of remand, setting aside the impugned order.