Appellant entitled to Cenvat Credit for hiring forklifts for material handling

The appellant was found entitled to Cenvat Credit for service tax paid on Supply of Tangible Goods services, specifically for hiring forklifts for material handling within the factory. The Hon'ble Member (Judicial) determined that the forklifts hired under this service were directly used for handling material integral to the manufacturing process of the final product within the factory, making them eligible for Cenvat Credit. Citing previous judgments where similar credits were allowed, the appeal was allowed, and the impugned order denying the credit was set aside.

---

---

Issues involved: Whether the appellant is entitled to Cenvat Credit for service tax paid on Supply of Tangible Goods services, specifically for hiring forklifts for material handling within the factory.

Analysis:
1. The issue in this case revolves around the eligibility of the appellant for Cenvat Credit concerning service tax paid on Supply of Tangible Goods services, particularly for hiring forklifts for material handling within the factory. The appellant argued that the forklifts hired under this service were used in the factory premises for handling material related to the manufacturing of the final product, thus falling under the definition of input services as per Rule 2(l) of the Cenvat Credit Rules, 2004.

2. The learned counsel for the appellant cited judgments, including Larsen & Tourbo Ltd and DBOI Global Services Pvt. Ltd, to support their claim that the forklifts hired under Supply of Tangible Goods services are indeed used directly for the manufacturing activity of the final product, making them eligible for Cenvat Credit.

3. On the other hand, the Joint Commissioner representing the revenue reiterated the findings of the impugned order, denying the Cenvat Credit.

4. After careful consideration of both sides' submissions and perusal of records, the Hon'ble Member (Judicial) noted that while the Supply of Tangible Goods service is not explicitly included in the inclusion clause of the definition of input service, the main clause of the definition is broad. The Member found that the forklifts hired under this service were directly used for handling material integral to the manufacturing process of the final product within the factory, making them eligible for Cenvat Credit.

5. Referring to previous judgments, particularly Larsen & Tourbo Ltd and DBOI Global Services Pvt. Ltd, where Cenvat Credit for Supply of Tangible Goods services was allowed, the Member concluded that the appellant is entitled to Cenvat Credit for such services. Consequently, the impugned order was set aside, and the appeal was allowed.

---