2017 (1) TMI 78 - AT - Central Excise

Tribunal grants cenvat credit on diverse services, overturning denial.

The Tribunal ruled in favor of the appellant, setting aside the denial of cenvat credit on various taxable services. It found that the services, including ... CENVAT credit - various services - denial on the ground that the services are not input services - Held that: - the civil construction work and fabrication of steel structure are in relation to setting up of the factory, which was specifically finding place in the definition of input service effective upto 31st March, 2011. With regard to service tax paid on labour charges, I find from the submissions of the appellant that those services were availed for the activities relating to the manufacturing business and thus, should be considered as input service for taking of cenvat credit. Legal fees and land investigation charges during the period 2010-2011, were covered under the phrase “activities relating to business” contained in definition of input service and after such period, it was specifically defined as eligible input service for the purpose of taking credit. With regard to other services, namely, telephone service, fabrication of canteen furniture and insurance of vehicles, the said services were used within the factory, which have the indirect nexus with the manufacture of the final product, and thus, confirm to the definition of input service. CENVAT credit allowed - appeal allowed - decided in favor of appellant. Issues: Denial of cenvat credit on various taxable services under the definition of 'input service'Civil Construction Work of Factory:The appellant argued that the credit for civil construction work of the factory was availed before the amendment to the definition of input service. The Tribunal agreed, stating that the disallowance of cenvat benefit based on the amended definition was not in line with the cenvat statute.Labour Charges Against Contractor:The appellant contended that the labour charges were for activities related to manufacturing and thus qualified as input services for cenvat credit. The Tribunal agreed with this argument and allowed the credit for labour charges.Legal Fees and Land Investigation Charges:The appellant claimed that legal fees and land investigation charges were eligible input services under the definition before and after a specific date. The Tribunal agreed, stating that these services were covered under the definition of input service for the relevant periods.Telephone Service Charges:The appellant argued that telephone service charges for the factory had a nexus with manufacturing activities. The Tribunal agreed, stating that such services used within the factory indirectly related to the manufacture of the final product, thus qualifying as input services.Fabrication of Steel Structure and Canteen Furniture, Insurance of Vehicles:The Tribunal found that these services, used within the factory and related to the manufacturing process or company operations, fell within the definition of input services. The Tribunal concluded that all the services in question conformed to the definition of input service for cenvat credit purposes.Decision:The Tribunal set aside the impugned order, ruling in favor of the appellant, as it found no merit in the denial of cenvat credit on the various taxable services. The appeal was allowed in favor of the appellant, emphasizing that the services met the criteria for input services as per the relevant statutory provisions.