2018 (5) TMI 1290 - AT - Central Excise

Tribunal allows cenvat credit on various services, rejects some post 01.04.2011. Discrepancies noted in show-cause notice.

Fouress Engineering (India) Ltd. Versus Commissioner Of Central Tax

The Tribunal partially allowed the appeal, permitting cenvat credit on services like Event Management, Credit Card Charges, Repair and Maintenance, ... CENVAT credit - various input services - Event Management services - Credit Card Charges for MD - Repair and Maintenance of Vehicle - miscellaneous services - Medi-claim insurance - membership of club - survey conducted for projects of land - Security at residence of CMD/JMD - Outdoor Catering Service - Execution of work at the factory - denial on account of nexus. Event Management services - Credit Card Charges for MD - Repair and Maintenance of Vehicle - miscellaneous services - Held that: - Event Management, Credit Card Charges for MD, Repair and Maintenance of Vehicle and miscellaneous services have already been held to be 'input service' in many cases and therefore these services are 'input services' - credit allowed. Medi-claim insurance - membership of club - survey conducted for projects of land - Held that: - they fall in the definition of 'input service' in view of the various decisions - reliance placed in the case of M/s. Murugappa Morgan Thermal Ceramics Ltd. Versus Commissioner of Central Excise, Chennai-III [2016 (4) TMI 370 - CESTAT CHENNAI] - credit allowed. Security at residence of CMD/JMD - Held that: - the same do not fall in the definition of 'input service' and therefore, the cenvat credit on security at residence of CMD/JMD rejected - credit not allowed. Outdoor Catering Service - Held that: - it is post 01.04.2011 and as per the Larger Bench decision in the case of Wipro Ltd. [2018 (4) TMI 149 - CESTAT BANGALORE], Larger Bench has held that Outdoor Catering Service is not eligible for cenvat credit post amendment dated 01.04.2011 vide Notification No. 3/2011 dated 01.03.2011 - the cenvat credit on Outdoor Catering post 01.04.2011 not allowed. Execution of work at the factory - Held that: - there is no allegation in the show-cause notice proposing to deny the cenvat credit on this service, the amount with regard to this service is merely included in the computation amount. Further, there is no finding by the original authority on this service. Therefore, the finding by the Commissioner is beyond the show-cause notice and the Order-in-Original and therefore not sustainable in law - credit allowed. Appeal allowed in part. Issues:1. Rejection of cenvat credit by Commissioner (Appeals) on certain services.2. Eligibility of various services as 'input service' for availing cenvat credit.3. Applicability of judicial precedents in determining eligibility of services.4. Disallowance of cenvat credit on specific services post 01.04.2011.5. Compliance with show-cause notice requirements in disallowing cenvat credit.Analysis:Issue 1: The appeal was against the rejection of cenvat credit amounting to Rs. 5,12,628 along with interest and penalty by the Commissioner (Appeals) based on the audit findings that certain services availed by the appellant were not eligible as 'input service' for cenvat credit.Issue 2: The appellant contended that services like Event Management, Credit Card Charges, Repair and Maintenance, and miscellaneous services had been previously allowed as 'input services' in their own case. They argued that services like medi-claim insurance, club membership, and survey conducted for land projects also qualified as 'input services' based on statutory requirements and judicial precedents.Issue 3: The appellant relied on judicial precedents such as Murugappa Morgan Therma/Ceramics Ltd. case and others to support their claim that certain services were eligible as 'input services' for cenvat credit.Issue 4: The Tribunal allowed cenvat credit on services like Event Management, Credit Card, Repair and Maintenance, medi-claim insurance, Club Membership, and survey conducted for land purchase. However, cenvat credit was rejected for security at the residence of CMD, and Outdoor Catering post 01.04.2011 based on a Larger Bench decision.Issue 5: The Tribunal found discrepancies in the show-cause notice regarding the disallowance of cenvat credit for Execution of work at the factory, as there were no specific allegations or findings by the original authority. Consequently, the Tribunal set aside the impugned order concerning this service.In conclusion, the Tribunal partly allowed the appeal, permitting cenvat credit on certain services while rejecting it on others based on the eligibility criteria of 'input service' and relevant judicial precedents.