Successful appeal grants CENVAT credit on bank charges, AMC, and pest control services

The appeal was successful as the Judicial Member overturned the Commissioner (A)'s decision to deny CENVAT credit on bank charges, AMC for service of attendance recording machine, and pest control services. The Judicial Member found a clear nexus between the disputed services and the manufacturing activity of the appellant, contrary to the Commissioner's assertion. Relying on precedents like MPI Machines Ltd. vs. CCE, Indore and Hindustan Coca-Cola Beverages (P) Ltd. vs. CCE, Hyderabad, the Judicial Member deemed the denial of credit legally unsustainable. The appellant was granted relief, and the impugned order was set aside on 21.09.2016.

---

---

Issues: Denial of CENVAT credit on bank charges, AMC for service of attendance recording machine, and pest control services.

Analysis:
The appeal was filed against the Commissioner (A)'s order denying CENVAT credit on certain services like bank charges, AMC, and pest control services. The appellant, engaged in manufacturing graphite products, argued that these services are eligible for credit as per Rule 2(l) of CENVAT Credit Rules, 2004. The appellant contended that various court decisions have interpreted input services broadly, including those indirectly related to the business. The appellant cited cases like MPI Machines Ltd. vs. CCE, Indore and Hindustan Coca-Cola Beverages (P) Ltd. vs. CCE, Hyderabad to support their argument.

The learned AR supported the findings of the impugned order, maintaining the denial of CENVAT credit on the mentioned services. After hearing both parties and considering the arguments along with the cited decisions, the Judicial Member held that the impugned order was legally unsustainable. The Commissioner (A) erred in denying the CENVAT credit by stating there was no nexus between the disputed services and the manufacturing activity of the appellant. The Judicial Member found a clear connection between the services and the appellant's business, thus allowing the appeal and setting aside the impugned order. The decision was pronounced in open court on 21.09.2016, providing consequential relief to the appellant.

---