2024 (7) TMI 1398 - AT - Central Excise

CENVAT Credit - input services - period March 2009 to May 2013 - denial on the ground that those services are not confirming to the definition of input service , contained in Rule 2(l) of the CENVAT Credit Rules, 2004 - HELD THAT - The disputed services involved in the present appeal were considered as input service by the Tribunal in the case of C.C.E., DELHI-III VERSUS FIAMM MINDA AUTOMOTIVE LTD. 2016 (3) TMI 64 - CESTAT NEW DELHI , SECURE METERS LTD VERSUS CE ST-UDAIPUR 2018 (8) TMI 950 - CESTAT NEW DELHI , ACCENTURE SERVICES PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI-II 2015 (3) TMI 1114 - CESTAT MUMBAI , M/S RELIANCE INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, LTU, MUMBAI 2016 (8) TMI 123 - CESTAT MUMBAI and RMZ INFOTECH PVT. LTD. VERSUS COMMR. OF CENTRAL TAX, BENGALURU EAST 2021 (11) TMI 1108 - CESTAT BANGALORE . During the course of the arguments, the appellant submitted fairly that post 01/04/2011, they would not be entitled for CENVAT credit on Rent-a-Cab service and accordingly, he would not press for the same. The appellant would pay up that part of the demand, as it relates to Rent-a-Cab service post 01/04/2011. We accept the contention of the appellant in view of the exceptions provided under the definition of input service w.e.f. 01/04/2011. The impugned order is modified to the extent of confirming the demand of CENVAT credit availed on Rent-a-Cab service w.e.f. 01/04/2011 along with interest. Rest of the demands are however set aside - Appeal allowed in part.

Summary

Issues:
- Denial of CENVAT credit on various services during the disputed period
- Interpretation of the definition of 'input service' under CENVAT Credit Rules, 2004
- Application of the un-amended and amended definitions of 'input service'
- Exclusion clause under the amended definition of 'input service'
- Precedents and judgments regarding the classification of disputed services as 'input service'

Analysis:

The appellant, engaged in the manufacture of Chemical Products, availed CENVAT credit on services during the disputed period. The Show Cause Notice proposed denial of CENVAT credit on specific services. The impugned order confirmed part of the demand, stating that the disputed services did not have an integral nexus to the manufacture of excisable goods. The appellant appealed this decision before the Tribunal, challenging the denial of CENVAT credit and imposition of penalties.

The Tribunal analyzed the case under both the un-amended and amended definitions of 'input service'. It referenced judgments by the Hon'ble Bombay High Court to establish that the disputed services used in business activities qualify as 'input service' pre-amendment. Post-amendment, services used directly or indirectly in relation to manufacturing are considered 'input service', unless falling under exclusion clauses. The Tribunal cited a relevant case to support the interpretation of 'input service' post-amendment.

The Tribunal noted previous cases where disputed services were classified as 'input service'. The Revenue relied on judgments to argue against considering the disputed services as 'input service'. However, the Tribunal referenced a case to explain the broad interpretation of 'input service' and the importance of services related to business activities in manufacturing.

During arguments, the appellant conceded not being entitled to CENVAT credit on 'Rent-a-Cab' service post-amendment. The Tribunal accepted this concession and modified the impugned order accordingly, confirming the demand related to 'Rent-a-Cab' service post-amendment. The rest of the demands were set aside, partially allowing the appeal.

In conclusion, the Tribunal partially allowed the appeal, modifying the impugned order to confirm the demand related to 'Rent-a-Cab' service post-amendment, while setting aside the rest of the demands.