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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 ..... ce 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. Management Consultancy Services - services on gratuity and superannuation funds - HELD THAT:- 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. Maintenance or Repair Service - HELD THAT:- This service is related to the services rendered by the dealers to the clients of the appellant and the dealers get reimbursement of the cost of these services. The services are of mandat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be remanded to the lower authorities for determining what is 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. Courier Services - HELD THAT:- 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 [2009 (3) TMI 136 - CESTAT, BANGALORE], wherein it was held that various services including courtier services were rendered in respect to business activity. Hence, credit is allowed. Mandatory and Additional Inspection Service - HELD THAT:- The appellant submitted that the cost of mandatory service inspection during the warranty period is part of their cost on which excise duty has already been paid. It is also stated that these mandatory services are provided to their customers to ensure that the consumable and critical items like filter and oil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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.
Subscription Fees - HELD THAT:- 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.
Works Contract Service - HELD THAT:- The service tax credit has been denied only on the imported services related to civil works which are excluded from the definition of 'input services', the same is upheld.
Conclusion - Services directly or indirectly related to manufacturing activities and statutory requirements were generally eligible for credit.
Appeal allowed in aprt. X X X X Extracts X X X X X X X X Extracts X X X X ..... he cenvat credit to the extent of Rs.1,89,74,510/- along with interest and imposed penalty under Rule 15(1) and 15(3) of the Cenvat Credit Rules, 2004. Hence, these two appeals. 4. The learned counsel for the appellant submitted that these two appeals ST/942/2009 and ST/21467/2018 are for the period April 2008 to February 2009 and October 2006 to March 2015, respectively. It is submitted that in Appeal No. ST/942/2009, the Commissioner in the impugned order has denied credit on the services viz., air travel agent service, car hiring service, management consultancy service. However for the subsequent period vide Order-in-Original No. 10/2017-18 dated 29.01.2018, the Commissioner had allowed service tax credit on air travel agent service, car hiring service and hence, on this ground itself the credit disallowed in the 1st impugned order should be allowed. With regard to Management Consultancy Service, the benefit was denied on welfare measures on the ground that these are used for the employees and hence, not related to manufacturing activity as reiterated in his reply to the show-cause notice at Para 13 of his reply dated 01.07.2009. He has further relied upon his submissions from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; 7. In Appeal No. ST/942/2009 the cenvat credit on Air Travel Agents services and Car Hiring services which have been disallowed has been allowed by the Commissioner for the subsequent period in the appellant's own case vide impugned Order-in-Original No.10/2017-18 dated 29.01.2018 in the second Appeal No. ST/21467/2018 filed before us, hence without going into the merits of the case, the same is allowed and the order to that extent stands set-aside. 7.1 Management Consultancy Service (Rs.44,92,310/-in Appeal No. ST/942/2009): The Commissioner has denied credit on the ground that these services are related to gratuity valuation, superannuation valuation, leave encashment valuation, post-retirement valuation, etc., which are part of welfare measures for the employees. Since, these services are not either directly or indirectly used in or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the factory. Since the transaction value for the machine includes the cost of such repair and maintenance services on which excise duty has already been discharged and since it is within the warranty period, cenvat credit cannot be denied. In the case of Lucas TVS Ltd. vs. CCE: 2020 (37) GSTL 180 (Tri.-Chennai), the Tribunal has observed that: "6. In the show cause notice, the sole allegation is that credit is ineligible since the input services do not have nexus with the manufacturing activity. Such an allegation is factually wrong since the supply of parts and components during the warranty claim definitely relates and has nexus with to the manufacturing activity of the appellant. At the time of adjudication, the original authority has given a go by to this allegation raised in show cause notice and has rejected the credit raising a new allegation stating that the credit is not eligible as the input services have been availed outside the place of removal. The authorities below have relied upon the decision of Hon'ble Apex Court in the case of Commissioner of Central Excise & Service Tax v. M/s. Ultratech Cement Ltd., reported in 2018 (9) G.S.T.L. 337 (S.C.) to observe t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise vide Interim Order No.40020/2023 dated 21.12.2023, wherein the Tribunal had discussed in detail with regard to the issue on whether the cenvat credit on GTA services for outward transportation of goods from the factory to the buyer's premises be denied in cases where the goods are sold on FOR (buyer's premises or should such matters be remanded to the lower authorities for determining what is the place of removal. The Tribunal observed as: "31. The Karnataka High Court in Bharat Fritz Werner considered the judgment of the Supreme Court in Ultratech Cements and also the Circular dated 08.06.2018 of the Board and held as follows: "13. The CESTAT, in the case of Bharat Fritz Werner Ltd. v. C.C., C.E. & S.T-Commissioner of Central Tax [CEA 56/2019], has recorded in paragraph No. 5 that as per the purchase orders, appellant was required to supply the goods at the buyer's premises and the price of goods would include 'outward freight'. Similarly, in the case of MAPAL India Pvt. Ltd. , the CESTAT has recorded a similar finding. ***** 16. This Court in the case of Madras Cements Ltd., has held as follows: "11. From the facts of the present case, it is clear from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed in Appeal Nos. E/21756/2017-SM, E/21757/2017-SM and E/21758/2017-SM are set aside; and (c) CEA No. 71/2019 is allowed and impugned order vide Final Order No. 20224/2019, dated 27-2 2019 passed in Appeal No. E/20302/2018-SM is set aside." 32. The interpretation of the judgment of the Supreme Court by the High Courts as above throws light on the controversy. The Rajasthan High Court in Mangalam Cements simply referred to the judgment of the Supreme Court without analyzing its applicability in the context of the case in denying the credit on GTA service. The Supreme Court set aside the said judgment and remanded the case to examine the facts in the light of the judgment. On the other hand, in the judgment of the Karnataka High Court in Bharat Fritz Werner, all aspects of the case have been considered, including the Circular dated 08.06.2018 of the Board, and the judgments of Supreme Court in Emco Ltd. and Roofit Industries to conclude that the place of removal is the buyer's premises. 33. No evidence has been placed by either side that the said judgment of the Karnataka High Court has been challenged before the Supreme Court by the department. 34. In such circumstances, fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce submitted that for these mandatory services, cenvat credit cannot be denied. So also, the additional services are provided after the warranty period for which bills are raised along with service tax payment on which credit has been availed. Since, these services are rendered after clearance of the final products, on which Excise duty has been already paid and also, they are registered under "Maintenance and Repair Service", hence, credit on this is allowed in view of the decision of Lucas TTVS Ltd. (supra). 8.2 Business Support Service (Rs.49,024/-) and Call Centre Services (Rs.1,440/-): These are services rendered by the dealers of the appellant after sale of goods and covered under the warranty service. Since the cost of warranty is included in the invoice value, on which tax has been discharged, the credit on this cannot be denied. Hence, it is allowed. 8.3 Casting Error (Rs.3,13,963/-): Since, no documents have been produced as to the services rendered under this category is either before the Commissioner nor before us, the same is denied for want of documents to prove the nature of service. On reimbursement of service tax, an amount of Rs.48705/- has been denied only on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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