Revenue's appeal dismissed as taxpayer entitled to Cenvat credit for air travel, catering, courier, hotel and construction services under Rule 2(l)

The HC dismissed the revenue's appeal regarding Cenvat credit claims for various input services including air travel, catering, courier, hotel, and construction services. The court relied on precedents establishing that service tax paid on civil work and lease rentals is admissible when the leased land is used for manufacturing, even indirectly. The HC noted that 2011 amendments to Rule 2(l) excluding certain services from input service definition were not retrospective and confirmed that factory premises setup for output services falls within input service definition. The court found no substantial question of law and upheld the taxpayer's entitlement to Cenvat credit benefits.

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Issues Involved:
The appeal filed under Section 35 (G) of the Central Excise Act, 1944 against the order of the Customs, Excise & Service Tax Appellate Tribunal granting Cenvat credit on various services denied by the authorities below.

Issue 1: Benefit of Cenvat Credit on Various Services
The Tribunal granted Cenvat credit on services like Air Travel Agent Service, Catering Service, CHA Service (Export), Courier Service, Event Management Service, Group Term Insurance Service, Hotel Service, Rent a Cab/Car Service, Repair and Maintenance Service (Car), Tour and Travel Service, and Construction Service, which had been denied by the lower authorities. The Tribunal's reasoning was based on the judgment in Commissioner of Central Excise Vs. Ultratech Cement Ltd., 2010, which held that if a service is availed in the course of business, the entitlement to Cenvat credit exists. The only exception was for catering service and rent a cab service, subject to recovery verification by the adjudicating authority.

Issue 2: Construction Service and Cenvat Credit
The appellant argued that the construction service could not be directly or indirectly related to the manufacture of final products. The respondent relied on the judgment in Commissioner of Central Excise Vs. Bellsonica Auto Components India P. Ltd., 2015, where it was held that services contributing directly or indirectly to the manufacture of final products are eligible for Cenvat credit. The Commissioner's reasoning emphasized that services should not remotely contribute to manufacturing, drawing a line to avoid undue extension of the definition of input services.

Issue 3: Interpretation of Rule 2(l) of Cenvat Credit Rules
The discussion revolved around Section 2(l) of the unamended 2004 Rules defining "input service" as any service used directly or indirectly in or in relation to the manufacture of final products. The case involved a factory constructed for manufacturing final products, and the dispute was whether the construction service qualified as an input service under this rule. The judgment in Bellsonica Auto Components clarified that services used in setting up a factory are covered under the definition of input services, allowing for Cenvat credit.

Outcome:
The Tribunal's denial of Cenvat credit was set aside based on precedents and interpretations of the Cenvat Credit Rules. The Court found no substantial question of law and dismissed the appeal accordingly.

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