Manufacturer entitled to CENVAT credit for all services used in manufacturing under Rule 2(l) regardless of specific mention in definition

CESTAT Ahmedabad allowed the appeal regarding CENVAT credit denial for various input services including renting of immovable property, business support services, courier services, telephone services, and other auxiliary services for the period August 2012 to November 2012. The tribunal held that since the appellant was exclusively engaged in manufacturing activities, all services used directly or indirectly in relation to manufacture qualify as input services under Rule 2(l) of CENVAT Credit Rules, 2004, regardless of whether specifically mentioned in the inclusive definition. The impugned order was set aside and CENVAT credit was allowed.

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Issues involved:
The judgment involves the demand of Cenvat Credit for various services from August 2012 to November 2012, specifically related to renting of immovable property, business support services, election & commissioning service, sponsorship services, warehouse services, general insurance services, courier services, telephone services, air travel agency, and pandal and shamiyana services. The main issue was whether these services qualify as input services under Rule 2(l) of Cenvat Credit Rules, 2004.

Renting of Immovable Property Services:
The Adjudicating authority denied credit for renting of immovable property services, stating that it had no nexus with the manufacturing unit. However, the Tribunal found that the renting of premises for the corporate office was directly related to the manufacturing activities, making it eligible for Cenvat Credit.

Interpretation of Inclusive Definition:
The Tribunal emphasized that the main part of the definition of input service under Rule 2(l) is broad enough to cover services used directly or indirectly in relation to the manufacture of final products. The inclusive part of the definition is meant to avoid misinterpretation, and denial of credit based on services not explicitly mentioned in the inclusive part is not justified.

Judgments Supporting Input Services:
Various judgments were cited to support the eligibility of the services in question as input services, including decisions related to business support/auxiliary services, erection and commissioning services, sponsorship services, warehouse services, general insurance services, courier services, telephone services, air travel agency services, and pandal and shamiyana services. The Tribunal concluded that based on these precedents, all the services were admissible input services qualifying under the definition of input service in the Cenvat Credit Rules, 2004.

Decision:
Considering the submissions and legal provisions, the Tribunal set aside the impugned order and allowed the appeal, stating that the appellant was entitled to Cenvat Credit on the services in question. The judgment was pronounced in open court on 06.11.2023.

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