Tribunal allows appeal for CENVAT credit on diverse services, emphasizing broad definition of "input service".

The Tribunal allowed the appeal, holding that CENVAT credit on various services including Commercial and Industrial Construction Service, Rent-a-Cab Service, Outdoor Catering Services, and Real Estate Agent Service is admissible as "Input Services" under the CENVAT Credit Rules, 2004. The Tribunal emphasized the broader scope of the definition of "input service" and set aside the impugned order, concluding that the services in question are used in relation to the manufacture and sale of final products or business activities.

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Issues Involved:
1. Admissibility of CENVAT credit on "Commercial and Industrial Construction Service".
2. Admissibility of CENVAT credit on "Rent-a-Cab Service".
3. Admissibility of CENVAT credit on "Outdoor Catering Services".
4. Admissibility of CENVAT credit on "Real Estate Agent Service".

Summary:

Commercial and Industrial Construction Service: The Tribunal referenced the Hon'ble Punjab & Haryana High Court's decision in *Belsonica Auto Components Private Ltd.*, which clarified that CENVAT credit on services related to the setting up of a factory is admissible. The court emphasized that the definition of "input service" under Rule 2(l) includes services used directly or indirectly in relation to the manufacture and clearance of final products. The amendment in 2011, which excluded construction services, is not retrospective and thus not applicable to the period in question.

Rent-a-Cab Service: The Tribunal cited the Hon'ble Punjab & Haryana High Court's decision in *Maruti Suzuki India Ltd.*, which held that transportation services for employees are integral to manufacturing activities. The provision of such services increases efficiency and production capacity, thus qualifying as "input service" under Rule 2(l) of the CENVAT Credit Rules, 2004.

Outdoor Catering Services: The Tribunal referred to the Hon'ble High Court of Bombay's decision in *Ultratech Cement Ltd.*, which held that services with a direct nexus to manufacturing activities, including mandatory canteen facilities under the Factories Act, 1948, qualify as "input service". The court emphasized that the definition of "input service" is broader than that of "input" and includes services used in relation to the business of manufacturing final products.

Real Estate Agent Service: The Tribunal referenced the Coordinate Bench at Mumbai's decision in *Axis Bank*, which allowed CENVAT credit for services used to procure residential accommodation for employees. The Tribunal found that such services are integrally connected to business activities and thus fall within the definition of "input service".

Conclusion: The Tribunal concluded that the issues raised in the show-cause notice and the impugned order are no longer res integra. Given the wider scope of the definition under Section 2(l) of the CENVAT Credit Rules, 2004, the services in question qualify as "Input Services" used in or in relation to the manufacture and sale of final products or business activities. Therefore, the Tribunal set aside the impugned order and allowed the appeal.

(Pronounced on 12.09.2023)

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