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of <h1>Tribunal allows CENVAT credit on essential services for marketing and manufacturing purposes</h1> <h3>M/s. Ramco Cements Ltd. Versus CCE, Puducherry</h3> The Tribunal allowed CENVAT credit on various services claimed by the appellant, including air travel, repair and maintenance, and regional sales office ... CENVAT credit - travel for marketting - Survey and Mapping Service - C&F agency service - services of Consulting Engineer and Management Consultant - subscription services - mechanical disallowance - Held that: - Integral connection of the expenses to the manufacturer appears and there is inextricable link between these two. Therefore appellant succeeds in its claim and in view of the relief granted substantially, there shall be no penalty. Repairs and maintenance service - Held that: - they are integral part of the manufacturing concern for which denial of CENVAT credit of the service tax paid on such services is ruled out. Air Travel Agency service - tour operator services - Held that: - services of such agencies were used to book tickets and carry out the travel by the officers for marketing as well as business promotion. Therefore Cenvat credit of the paid on such services is allowed. The renting service availed relating to regional sales office service was for the purpose of business for which CENVAT credit is allowable. Appeal allowed - decided in favor of appellant. Issues:1. Disallowance of CENVAT credit on various services claimed by the appellant.2. Necessity and relevance of expenses for the purpose of manufacturing cement.3. Allowance of CENVAT credit on repair and maintenance services.4. Allowance of CENVAT credit on air travel, tour operator, and regional sales office renting services.5. Denial of CENVAT credit on works contract service.Analysis:1. The appellant claimed CENVAT credit on services like Air Travel, Survey and Mapping, Consulting Engineering, Management Consultant, C&F Agency, and Subscription Services. The consultant argued that the disallowance of credit was mechanical without considering the necessity of these expenses for cement manufacturing. The Tribunal found the expenses essential for marketing and manufacturing purposes, allowing the credit due to an integral connection to the manufacturing process.2. Regarding the services of Repair & Maintenance, the Tribunal considered them integral to the manufacturing concern, disallowing the denial of CENVAT credit on the service tax paid for such services. The credit was allowed due to the essential nature of these services in the manufacturing process.3. CENVAT credit on Air Travel Agency and Tour Operator services was allowed as they were used for marketing and business promotion purposes. The credit was deemed valid as the services were directly related to business activities. However, the credit for Works Contract Service was denied due to lack of evidence and the service not being directly related to repair and maintenance activities.4. The renting of the Regional Sales Office service was considered for business purposes, and CENVAT credit was allowed on this service. The Tribunal noted that the appellant had no intention to cause evasion, leading to no penalty being imposed. Overall, relief was granted on all services claimed except for the Works Contract Service, which did not qualify for CENVAT credit based on the nature of the service.
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