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TMI Blog2025 (2) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... stered as an Input Service Distributor (ISD) under Rule 4A of the Service Tax Rules, 1994 for distributing the credit of service tax paid on the services/accounted for at their corporate office to their manufacturing units. 3. On verification of records, it was found that the appellant had availed the credit of service tax distributed from their Head Office and utilized the same for payment of duty on their manufactured goods for the period from October 2006 to June 2007. Since some of the services were found to be ineligible for availing credit, a show-cause notice No.23/2009-ST dated 01.05.2009 was issued which culminated into the impugned Order-in-Original No.15/2009 dated 28.08.2009 denying the service tax credit and demanding service tax amount of Rs.88,74,939/- along with Education Cess, Secondary and Higher Education Cess plus interest and imposed a penalty of Rs.2000/- in terms of Rule 15(3) of Cenvat Credit Rules (CCR), 2004. Appellant is in appeal before us in ST/942/2009. 3.1 Similar show-cause notices were issued vide show-cause notice No.99/2007 dated 05.11.2007 and No.57/2008 dated 02.09.2008, which culminated into impugned Order-in-Original No.24/2008 dated 19.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel reiterated the reply at Para 16 of his reply to show-cause notice in the first appeal and his submissions at Page 582 to 591 of the paper-book in his second appeal. He also relied on decisions in the case of Tata Motors Ltd. vs. CCE 2016 (46) STR 281, Lucas TVS Ltd. vs. CCE 2020 (37) GSTL 180 (Tri. Chennai) and Reliance Industries Ltd. Vs. CCE 2022 (380) ELT 457. 4.3 With regard to Insurance Auxiliary Services, transportation of goods from factory to customers and C & F Agents Services, he reiterated his reply to the show-cause notice. 4.4. With regard to courier service, he relies on decisions in the case of Bharat Fritz Werner Ltd. Vs. CC 2022 (66) GSTL 434 (Kar.) and Hindustan Zinc Ltd. Vs. CCE 2022 (65) GSTL 91. 4.5 Similarly with regard to various other services, the appellant has provided detailed submissions which will be discussed later individually service- wise. 5. The learned Authorized Representative (AR) reiterated the findings of the Commissioner in the impugned orders. 6. Heard both sides. The core dispute in these two appeals is whether the various input services on which cenvat credit has been claimed by the appellant are used in or relation to the manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility, finance accounting and taxation etc., have been subsequently allowed in Order-in-Original No.10/2017-18 dated 29.01.2018. It is also stated that the services related to salary profile in terms of welfare measures was only denied for the later period. In view of the above, the matter is remanded for verification of the documents submitted by the appellant to examine whether the management consultant service is related to R & D, finance, trading, legal services, production management etc. In Appeal No. ST/21467/2018 on Management Consultancy Service (Rs.36,551/-), the Commissioner has allowed cenvat credit on most of the Management Consultancy Services except for service tax credit relating to services on gratuity and superannuation funds, which are basically related to the salary profile of the employees. The same is rightly denied since these services are not related to the manufacturing activities of the appellant; hence, it is disallowed. 7.2 Maintenance or Repair (Rs.36,42,586/- and Rs.18,12,560/-) which is common to both the appeals: This service is related to the services rendered by the dealers to the clients of the appellant and the dealers get reimbursement of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself. It is not necessary that all input services should be availed within the factory itself. The restriction in respect of inputs does not apply to input services. The Hon'ble High Court in the case of M/s. Deepak Fertilizers & Petro-chemicals Corporation Ltd., reported in 2013 (32) S.T.R. 532 (Bom.) has held that it is not necessary that the input services should be availed inside the factory itself. Thus, the rejection of credit observing that the said warranty services have been availed beyond the place of removal is without any legal basis." In view of the above the cenvat credit stands allowed. 7.3 Insurance Auxiliary Services (Rs.2,52,683/-): These are the services which are related to medical insurance of employees, insurance of warehouse/branch office, transit insurance for space and car insurance used for sales promotion. Since, all these services are related to and add value to the manufacturing activities of the appellant and since the above services are also statutory requirement, they are eligible for the cenvat credit, hence allowed. 7.4 GTA-Outward Transportation Service (Rs.5,69,504/- and Rs.12,86,881/-) in both the appeals: Transportation of goods from wareho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f completion of sale of the goods. 12. Since we are of the opinion that the sale had concluded only after the delivery of the goods was made at the address of the buyer, in the facts of the present case the appellant-assessee would be entitled to the benefit of Cenvat credit on Service Tax paid on outward transportation of goods by the assessee even after 1-4-2008. The appellant assessee would thus be entitled to such benefit for the period 1-4-2008 to 31-7-2008 which has been denied to it by the authorities below. 13. For the forgoing reasons, this appeal stands allowed. The question of law is answered in favour of the assessee and against the Revenue. The order of the Tribunal to the extent of disallowing Cenvat credit to the appellant for the period after 31-3-2008 is quashed." 17. The Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs, New Delhi, has issued Circular dated 8-6-2018 and clarified the definition, 'Place of Removal'. In Para 5 of the Circular, the Ministry has referred to the judgment in the case of CCE & ST v. Ultra Tech Cement Ltd. [Civil Appeal No. 11261 of 2016, dated 1-2-2018] [2018 (9) G.S.T.L. 337 (S.C.)] and stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.2018 of the Board to determine the admissibility of CENVAT credit on the GTA Service upto the place of removal." In view of the above Larger Bench decision, this issue is remanded to determine the admissibility of CENVAT credit on the GTA Service up to the place of removal. 7.6 Courier Services (Rs.81,626/- and Rs.14,90,660/-) both the appeals: The Commissioner has denied the cenvat credit on the ground that the courier service is used for transportation of materials from central warehouse to feeder warehouse and branches for replacement of materials under warranty or for providing maintenance or repair services. It is pertinent to refer to decision rendered in the case of CCE vs. CCL Products (India) Ltd.: 2012 (277) ELT 177 (Tri.-Bang.), wherein it was held that various services including courtier services were rendered in respect to business activity. Hence, credit is allowed. Appeal No. ST/21467/2018 8.1 Mandatory and Additional Inspection Service (Rs.1,52,552/-): These services are provided after sale of equipment by entrusted inspection agency on behalf of the appellant and these inspection agencies raise the bills at the rates specified by the appellant and charge ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the fact that the membership fees and service tax paid on the club membership has nothing to do with the manufacturing activities of the appellant. The packing services (Rs.39,270/-) are meant for packing of parts locally procured which are used for maintenance and repair, which forms part of sale process and relates to packing of final products manufactured by them, which has nexus with the manufacturing activities, hence allowed. 8.6 Insurance Services for the plant, machinery and insurance for employees have all been allowed and what is disallowed is only those insurance policies that cover the family members of the employee that is to the extent of Rs.5,42,966/-. Since, the policies are related to the family members, this has been rightly denied. 8.7 Subscription Fees (Rs.3,923/-): This is the fees paid on taking membership of Indian Construction Equipment Manufacturer Association in order to participate in their exhibitions, in order to promote their products. The cost of which is included in the manufactured final product; hence, it is allowed. 8.8 Works Contract Service (Rs.56,350/-): The service tax credit has been denied only on the imported services related to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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