CESTAT ruling on cenvat credit for services: courier allowed, repair within premises, security denied

The appeal by Bharat Bijlee Ltd. against the denial of cenvat credit for security, courier, and repair services was heard by the Appellate Tribunal CESTAT MUMBAI. The Tribunal allowed credit for courier services for documentation purposes but not for procurement of inputs or clearance of finished goods. Additionally, credit for repair and maintenance services within the factory premises was permitted. However, the denial of credit for security services for transit to buyer's premises was upheld. The penalty imposed was also maintained due to contradictory arguments by the appellant. The appeal was partially allowed based on these findings.

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Issues:
- Denial of cenvat credit for security services, courier services, and repair and maintenance services.

Analysis:
The appeal filed against the denial of cenvat credit for various services by Bharat Bijlee Ltd. was heard by the Appellate Tribunal CESTAT MUMBAI. The appellant argued that due to the nature of their expensive products, they employed security services to ensure safe delivery to clients. They contended that the buyer's premises should be considered the place of removal, citing a Tribunal decision allowing cenvat credit for security services in transportation. However, the Tribunal found that since the goods were not intended for export, the decision cited was not applicable, and credit for security services availed for transit to the buyer's premises was deemed inadmissible.

Regarding courier services for documents and small components, the appellant relied on various decisions to support their claim for cenvat credit. The Tribunal allowed credit for courier services used for documentation purposes but clarified that credit for procurement of inputs and clearance of finished goods would not be admissible.

The issue of denial of cenvat credit for repair and maintenance services for office furniture within the factory premises was also addressed. The appellant argued that credit for such input services should not be denied. The Tribunal agreed with this contention and allowed cenvat credit for repair and maintenance services used within the factory premises.

Lastly, the appellant challenged the penalty imposed and the invocation of an extended period of limitation. The Tribunal noted that the law on the issues raised was clear, and there was no room for interpretation. The appellant's contradictory stance on including freight and insurance in the assessable value and claiming the buyer's premises as the place of removal weakened their argument against the penalty. Consequently, the appeal was allowed for courier services related to documentation and receipt of inputs, as well as for credit of repair and maintenance services used within the factory premises.

In conclusion, the appeal was allowed based on the Tribunal's findings, and the decision was pronounced in court on 27/10/17.

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