2017 (10) TMI 1638 - AT - Central Excise

Appellate Tribunal Allows Cenvat Credit Appeal, Emphasizes Correct Interpretation of Input Services

GMM Pfaudler Limited Versus CCE & C. Anand (S)

The appeal before the Appellate Tribunal CESTAT Ahmedabad centered on the eligibility of the appellant to avail Cenvat credit on specific services. The ... CENVAT Credit - input services - Hotel Services/Mandap Keeper Services - Designing and Scrip Writing Services - HELD THAT:- Both the lower authorities have not considered the provisions of definition of Input Services as per Rule 2 (l) of CCR, 2004 in its correct perspective. Similar issue of availment of Cenvat on the Design Services and Accommodation Services was considered by Tribunal Bench in the case of M/S. DR. REDDY'S LABORATORIES LTD. VERSUS CC, CE&ST, HYDERABAD-IV [2016 (11) TMI 858 - CESTAT HYDERABAD] and held in the favour of the assesses. The ratio of the aforesaid decision of M/s Dr. Reddys Laboratories Ltd would apply in this case - the impugned order is unsustainable and liable to be set-aside - Appeal allowed. Issues:Whether appellant is eligible for availment of Cenvat credit of service tax paid on Hotel Services/Mandap Keeper Services, Designing and Scrip Writing Services during April 2010 to May 2010.Analysis:The appeal before the Appellate Tribunal CESTAT Ahmedabad involved the consideration of whether the appellant could avail Cenvat credit on specific services during a particular period. The issue revolved around the interpretation of the definition of Input Services as per Rule 2(l) of CCR, 2004. The appellant claimed that the Hotel and Mandap Keeper Services were incurred for employees traveling for sales promotion, and the design services were for product advertisement. The Member (Judicial) noted that the lower authorities had not correctly applied the definition of Input Services. The Tribunal's decision in the case of M/s. Dr. Reddys Laboratories Ltd. was cited, where it was held in favor of the assesses regarding similar services. The Member (Judicial) found that the ratio of the Dr. Reddys Laboratories Ltd. case applied in the present matter, leading to the conclusion that the impugned order was unsustainable.The Member (Judicial) referenced the Tribunal's decision in the case of M/s Reliance Industries Ltd. to support the conclusion. Ultimately, the impugned order was set aside, and the appeal was allowed in favor of the appellant. The judgment highlighted the importance of correctly interpreting the provisions of Input Services under the relevant rules and cited precedents to support the decision. The legal analysis focused on the specific services in question and their eligibility for Cenvat credit, emphasizing the need for a thorough examination of the legal framework and relevant case law in reaching a decision.