2015 (10) TMI 1210 - AT - Central Excise

Court upholds cenvat credit for courier services as 'input service'

The appeal challenged the eligibility of cenvat credit on courier services utilized for delivering final products. The court upheld the order allowing the ... Denial of CENVAT Credit - Courier Service - Held that:- It an admitted fact on record that the appellant had received the courier services for speedy delivery of the final product to their customers after clearance from the factory. The service providers are registered under the category of ‘courier service’. Since the services availed from the courier agency are relating to the business activities of the appellant, in terms of the definition of input service, service tax paid on such taxable service is eligible for cenvat benefit. Therefore, I do not find any infirmity in the impugned order, and as such, the appeal filed by the Revenue appellant is dismissed. The Respondent is eligible for consequential relief, if any, as per law. - Decided against Revenue. Issues:- Whether the cenvat credit taken by the appellant on courier service is eligibleRs.- Whether courier service can be considered as outward transportation provided by a goods transport agencyRs.- Whether the definition of 'input service' under Rule 2(l) of the Cenvat Credit Rules applies to the courier service utilized by the appellant for delivery of final productsRs.Analysis:The appeal in this case challenges an order by the Commissioner of Central Excise (Appeals) - Jaipur, which allowed the cenvat credit taken by the appellant on courier service by ruling that such service does not qualify as outward transportation provided by a goods transport agency. The appellant, the Revenue, argued that the courier services used by the respondent for delivering final products to customers should be considered outward transportation, thus making them ineligible for cenvat credit under the definition of 'input service' in Rule 2(l) of the Cenvat Credit Rules.Upon hearing arguments from both sides and examining the records, it was established that the appellant had indeed utilized courier services for the speedy delivery of final products to customers post-factory clearance. The service providers were registered under the category of 'courier service.' As these services were directly related to the business activities of the appellant, the service tax paid on such taxable services was deemed eligible for cenvat benefit. Consequently, the impugned order allowing the cenvat credit on courier services was upheld, and the appeal filed by the Revenue appellant was dismissed.The judgment emphasized that since the courier services were integral to the business operations of the appellant and fell within the definition of 'input service,' there was no deficiency in the impugned order. Therefore, the respondent was deemed eligible for any consequential relief as per the law. The decision clarifies the applicability of cenvat credit rules to specific services utilized in business activities, ensuring clarity and compliance within the taxation framework.