2016 (5) TMI 1281 - AT - Central Excise

Appellate authority allows Cenvat credit on various services, overturning denial order.

The appellate authority ruled in favor of the appellant, allowing the availment of Cenvat credit on services like rent-a-cab, mobile phone services, ... Cenvat credit - service tax paid by the service providers in respect of rent-a-cab services, mobile phone services, telephone services used in residence and guest house, pest control of factory and office and group insurance of workmen compensation - Held that:- the issue is now seems to be settled in favour of the appellant by the Tribunal decision in the case of Stanzen Toyotetsu India Pvt. Ltd. [2008 (12) TMI 118 - CESTAT Bangalore], which has been upheld by the Hon’ble High Court of Karnataka reported in [2011 (4) TMI 201 - KARNATAKA HIGH COURT]. In the said judgement, the Tribunal has held that service tax paid on the canteen services, transportation of employees, group insurance/health policy are eligible for availing Cenvat credit. As regards the Cenvat Credit on service tax paid on mobile phone and the residential telephones, the judgement of Hon’ble High Court of Bombay in the case of CCE Vs. Ultratech Cement, Customs, Excise and Service Tax Appellate Tribunal [2010 (9) TMI 19 - High Court of Bombay] and CCE Vs. Excel Crop Care Ltd. [2008 (7) TMI 160 - HIGH COURT GUJARAT] are directly on the point and holds Cenvat Credit is allowed on the service tax paid. - Decided in favour of appellant Issues involved: Denial of Cenvat Credit on various services like rent-a-cab, mobile phone services, telephone services, pest control, and group insurance for workmen compensation.Analysis:1. The appeal was against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mumbai, regarding the denial of Cenvat Credit on certain services used by the appellant.2. Despite the appellant not appearing, the appeal was taken up for disposal due to its age.3. The issue revolved around the eligibility of Cenvat Credit on services like rent-a-cab, mobile phone services, telephone services, pest control, and group insurance, with lower authorities concluding that these services were not integrally connected to the manufacturing activities of the appellant.4. The learned DR argued citing precedents that services like telephones in guest houses and service tax paid on such facilities were ineligible for Cenvat Credit, relying on previous judgments and decisions.5. However, the Tribunal's decision in the case of Stanzen Toyotetsu India Pvt. Ltd. and subsequent validation by the Karnataka High Court supported the appellant's eligibility for Cenvat Credit on services like canteen services, transportation of employees, and group insurance/health policy.6. Additionally, judgments from the Bombay High Court and Gujarat High Court confirmed that Cenvat Credit was allowed on service tax paid for mobile phone and residential telephones.7. Considering the precedents and arguments presented, the appellate authority found in favor of the appellant, allowing the availment of Cenvat credit on the various services and setting aside the impugned order.