2017 (9) TMI 1766 - AT - Central Excise

CESTAT allows Cenvat credit for specific services but denies for others. Insurance claim rejected.

M/s Indo Alusys Industries Ltd. Versus CCE, Alwar

The Appellate Tribunal CESTAT NEW DELHI allowed Cenvat credit for commission agency service, advertising agency service, courier service, and membership ... CENVAT Credit - various input services - commission agent service - advertising agency service - courier service - membership of subscription service - cleaning service - renting of immovable property services - insurance of vehicles used within the factory. Commission agent service - advertising agency service - courier service - membership of subscription service - Held that:- Tribunal in the case of the appellant itself INDO ALUSYS INDUSTRIES LIMITED VERSUS C.C.E., ALWAR [2016 (7) TMI 363 - CESTAT NEW DELHI] has allowed the Cenvat benefit on the taxable services i.e. commission agent service, advertising agency service, courier service and membership of subscription service - credit on these services allowed. Cleaning service - renting of immovable property services - Held that:- The said services were utilized in the head office of the appellant. Since, those services were not in connection with the manufacture of the final product in the factory, such services should not fall under the scope and ambit of ‘input services’ for availment of Cenvat credit - credit not allowed. Insurance of vehicles used within the factory - Held that:- The appellant had not produced any document to show that service tax has been paid for insuring the vehicles used within the factory. Thus, in absence of such substantiation, the Cenvat credit cannot be extended on the insurance service - credit not allowed. Appeal allowed in part. Issues: Denial of Cenvat credit for various taxable services including advertising/publication, cleaning service, insurance of vehicles, renting of immovable property, membership expenses, courier agency service, tour operator service, and insurance for in-transit stock.In this judgment by the Appellate Tribunal CESTAT NEW DELHI, the issue revolved around the denial of Cenvat credit for multiple taxable services used by the appellant. The appellant argued that a previous order by the Tribunal had allowed Cenvat benefit for certain services like commission agency service, advertising agency service, courier agency service, and membership and subscription service. The appellant contended that the denial of Cenvat benefit for these services in the present case should be overturned. Additionally, the appellant claimed that other services were used in or in relation to the manufacture of the final product and thus should be eligible for Cenvat benefit under Rule 2(l) of the Cenvat Credit Rules, 2004.The Revenue, on the other hand, supported the findings of the impugned order and argued against granting Cenvat credit for cleaning service, vehicle insurance, and renting of immovable property used at the appellant's head office, which was situated away from the factory. The Revenue contended that since these services did not have a nexus with the manufacturing process, they should not be considered as input services for claiming Cenvat benefit.After hearing both parties and examining the records, the Tribunal noted that a previous decision had allowed Cenvat benefit for certain services in the case of the appellant. Consequently, the Tribunal held that the appellant was indeed eligible for Cenvat benefit concerning commission agent service, advertising agency service, courier service, and membership & subscription service. However, regarding cleaning service and renting of immovable property services used at the head office, the Tribunal found that these services were not related to the manufacturing process and hence did not qualify as input services for Cenvat credit. Moreover, the appellant failed to provide evidence of paying service tax for insuring vehicles used within the factory, leading the Tribunal to reject the claim for Cenvat credit on insurance services.In conclusion, the Tribunal disposed of the appeal by granting Cenvat benefit for specific taxable services while dismissing the appeal concerning insurance of vehicles, cleaning service, and renting of immovable property, as these services did not meet the criteria of input services for Cenvat credit. The judgment was pronounced on 19.9.2017.