2016 (10) TMI 510 - AT - Central Excise

Appeal Allowed on Disallowed Cenvat Credit for Input Services

The Tribunal allowed the appeal regarding the disallowed Cenvat credit on three services, finding a valid connection between the input services and ... Cenvat credit - Input service - Nexus between input services and manufacturing activity - Benefit of input services used for research and development - Condonation of delayCenvat credit - Input service - Nexus between input services and manufacturing activity - Benefit of input services used for research and development - Admissibility of Cenvat credit on Photograph Services, Outdoor Catering and Research & Development Services - HELD THAT: - The Tribunal examined the claim of Cenvat credit on three identified input services and the nexus of each service to the appellant's manufacturing activity. The appellant explained that Photograph Services were used to verify manufacturing processes, rectify defects and for R&D purposes; Outdoor Catering related to food provided to employees (carriers); and Research & Development Services were employed to improve technology and product efficiency in the braking system. The Tribunal found that these justifications demonstrate an integral connection between the input services and the manufacturing activity, and that the services serve the purpose of the manufacturing operations. On this basis the Cenvat credit claimed on all three services was held to be admissible.Cenvat credit on Photograph Services, Outdoor Catering and Research & Development Services is allowed.Condonation of delay - Application for condonation of delay in filing the appeal - HELD THAT: - The appellant sought condonation for a seven-day delay in filing the appeal. The Tribunal observed the absence of any deliberate intention to delay prosecution of the appeal and exercised its discretion to condone the delay. Consequently, the appeal was admitted and taken up for disposal.Seven-day delay in filing the appeal is condoned and the appeal is admitted.Adjournment for hearing - Hearing date for Appeal No. E/40327/2015 - HELD THAT: - The appellant sought time to argue Appeal No. E/40327/2015 pending instructions. The Tribunal recorded that the appeal would be heard on the specified date and listed the matter accordingly for further hearing.Appeal No. E/40327/2015 posted for hearing on 22.06.2016.Final Conclusion: The Tribunal condoned the short delay in filing the appeal, admitted and allowed Appeal No. E/40325/2015 by permitting Cenvat credit on Photograph Services, Outdoor Catering and Research & Development Services on the basis of an integral nexus with manufacturing activity; Appeal No. E/40327/2015 was listed for hearing on 22.06.2016. Issues:Delay in filing the appealDisallowed Cenvat credit on three servicesNexus between input services and manufacturing activityDelay in filing the appeal:The appellant acknowledged a delay of seven days in filing the appeal but asserted no deliberate intention in the delay. The Tribunal, finding no deliberate intention, condoned the delay and admitted the appeal for disposal.Disallowed Cenvat credit on three services:The appellant contended that Cenvat credit on photograph services, outdoor catering, and research & development services was disallowed. They provided justifications for each service, such as using photograph services for verifying the manufacturing process, outdoor catering for providing food to employees, and research & development services for improving technology in the braking system. The Revenue argued there was no nexus between the claimed input services and the manufacturing activity. However, after hearing both sides and examining the records, the Tribunal found an integral connection between the input services and the manufacturing activity, thereby allowing Cenvat credit on all three items.Nexus between input services and manufacturing activity:The Revenue contended that there was no connection between the claimed input services and the manufacturing activity. However, the Tribunal disagreed, stating that the justifications provided by the appellant demonstrated a clear purpose for the manufacturing activity. The Tribunal found an integral connection between the input services and the manufacturing activity, leading to the allowance of Cenvat credit on all three items.In conclusion, the Tribunal allowed the appeal regarding the disallowed Cenvat credit on the three services, finding a valid connection between the input services and the manufacturing activity. Additionally, an appeal scheduled for a later date was granted time for arguments, and both miscellaneous applications were allowed.