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of <h1>Tribunal allows Cenvat credit on mobile services, rejects CHA & construction services appeal</h1> <h3>EXCEL CROP CARE LIMITED Versus CCE, AHMEDABAD</h3> The Tribunal allowed the appeal for the Cenvat credit of service tax paid on mobile phone services but rejected the appeals for CHA services and ... Cenvat Credit of Service Tax paid on (i) Mobile Phone – Allowed, (ii) CHA service in relation to export – Disallowed, and (iii)Construction Service in relation to advertisement – Disallowed Issues involved: Admissibility of Cenvat credit of service tax paid on input services like use of mobile phones, CHA services for export, construction services related to advertisement, and mandap keeper's services.Analysis:(a) Credit of service tax on mobile phones:The appellant claimed Cenvat credit for service tax paid on mobile phone services used by their employees. The department objected, stating that the phones were not installed in the factory premises, citing a circular from 2003. The appellant argued that the circular was issued under different rules and that the Tribunal had allowed similar credits in a previous case. The Tribunal allowed the appeal, considering the consolidated Cenvat Credit Rules of 2004.(b) Credit of service tax on CHA services for export:The appellant used CHA services for exporting goods and sought credit for the service tax paid. The department contended that CHA services were not directly related to the manufacturing process. The appellant argued that the definition of 'input service' is broad and covers business activities. The Tribunal rejected the appeal, stating that CHA services at the port area were not part of manufacturing or clearance activities.(c) Credit of service tax on construction services for advertisement:The appellant used construction services to prepare circles/gardens and put up signboards for advertising. They claimed credit for the service tax paid on these services. The department argued that setting up circles/gardens away from the factory for advertising purposes did not qualify as an activity related to advertisement. The Tribunal agreed, stating that such activities could not be broadly interpreted as part of advertising services.(d) Mandap keeper's services in relation to product development:The appellant did not pursue this point further during the proceedings.The Tribunal considered both sides' submissions and made decisions on each issue. It allowed the appeal for mobile phone service tax credit but rejected the appeals for CHA services and construction services related to advertisement. The Tribunal emphasized the need for a clear nexus between the services and the business activities to qualify for credit. Additionally, the Tribunal set aside the penalty imposed on the appellant, as the disputes arose from interpretational differences. The appeal was partly allowed based on the Tribunal's decisions on the individual issues.
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