TaxTMI 
TaxTMI 
2024 (3) TMI 1038
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....ishes falling under Chapter Heading 32 and 38 of the Central Excise Tariff Act, 1985. During the period from January, 2006 to February, 2011, the head office of the appellant in Mumbai which was registered as Input Service Distributor ('ISD'), distributed the credit in respect of courier service, clearing and forwarding service, mandap keeper service, event management and cargo handling service to the appellant. The appellant was also availing Cenvat Credit of service tax paid on various input services such as rent a cab service, courier service, construction service, pest control service, drinking water service, testing service, clearing & forwarding agent service, event management service etc on the ground that the same were used in or in relation to manufacturing of such excisable products. Audit of the appellant's unit was conducted and during the audit, it was observed that the credit availed by the appellant in respect of various input services as mentioned above are ineligible as the said services do not fall within the purview of 'input services' as defied under Rule 2(l) of CCR. Consequently, various show cause notices for the relevant period were issued to the appellan....
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....ces on account of lack of nexus between the service and the manufacture of final products. 4.3 She further submits that 'input service' has been defined under Rule 2(l) of the CCR and during the relevant period, the definition of 'input service' can be divided into two parts: a) Services which are used by the manufacturer whether directly or indirectly, in relation to the manufacture of the final products and clearance of final products from/upto the place of removal; b) Inclusive part of the definition which includes services used in relation to activities related to business and other services. 4.4 She also submits that the services, on which Cenvat credit has been availed during the relevant period, are used in relation to the manufacturing of the final products and clearance of final products from/upto the place of removal and hence, the said services are covered under the first part of the definition itself. 4.5 She further submits that the use of the phrase 'in relation to' widens the definition of the input services and the inclusive part of the definition specifically covers the activities relating to business i.e. any service in relation to busin....
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.... c) Commissioner of Central GST, Gurgaon vs. M/s. DLF - 2023 (70) G.S.T.L 237 (P&H) d) Carrier Airconditioning & Refrigeration Ltd vs. C.C.E., Delhi-IV - 2016 (41) S.T.R. 824 (Tri. - Chan.) • Rent a cab service 4.8 The Cenvat Credit in respect of Rent-a-cab service has been denied on the ground that the said services are not used in relation to manufacture of final products and also, the cost for the same has been recovered from the employees. In this regard, she submits that rent-a-cab service has been availed to provide conveyance facilities to the employees for visiting the offices of various authorities like Income Tax Department, Excise Department, VAT Department etc for official work for complying statutory requirements. For this purpose, hiring the cabs is necessary for smooth functioning of the business. Therefore, rent-a-cab service is an 'input service' as the same qualifies as 'activity relating to business' of the appellant. In support of her submission, she relies on the following case laws: a) Commissioner of CE, Delhi-III vs. Maruti Suzuki India Ltd - 2017 (49) S.T.R. 261 (P & H) b) Microsoft India (R&D) Pvt Ltd. vs. Com....
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....llant had merely recovered 30% of the bill amount paid to outdoor caterer and balance 70 % is the cost to the company which forms part of the manufacturing cost. The appellant had reversed the credit with interest pursuant to the 30% cost recovered from the employees. Therefore, the appellant is entitled to the credit of the 70% of the cost of outdoor catering borne by them. • Services used by the Head Office (ISD) 4.11 The learned Counsel submits that the learned Commissioner has denied the Cenvat Credit in respect of courier service, mandap keeper service, event management, cargo handling and C&F services on the ground that the same have been used by the head office of the appellant and not in relation to manufacturing activities of the appellant. Therefore, the Cenvat Credit distributed by the ISD to the appellant is not admissible. In this regard, she submits that during the relevant period, there was no condition prescribed under Rule 7 of the CCR for distribution of the credit by an ISD pertaining to the services, which were attributable to the particular unit. The said condition was made effective from 01.04.2012 i.e. after the period involved in the instant ....
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....mission, she places reliance on the following case-laws: a) Commissioner of Central Excise, Delhi-III vs. Maruti Suzuki India Ltd. - 2017 (49) S.T.R. 261 (P & H) b) Microsoft India (R&D) Pvt. Ltd. vs. Commissioner of CE & ST, Bangalore - 2022 (56) G.S.T.L. 29 (Tri.- Bang) • Event Management Services 4.14 As regards event management services, the Cenvat Credit has been denied on the ground that the said services have no relation with the manufacturing activities of the appellant and the same cannot be attributable to the appellant. The learned Counsel justifies the expenses on event management services, which are used for promotion and launching of products in the event and are essential for promotion of products of the Company. She further submits that even if the services are used by the head office, the credit of the same is allowable. Further, during the relevant period, the credit could have been distributed to any unit under Rule 7 of the CCR. The same has been held in the following decisions: a) Axis Bank Ltd. vs. Commissioner of Service Tax Mumbai and vice versa - 2017 (3) G.S.T.L. 427 (Tri. Mumbai) [affirmed by the Bombay High Cour....
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....ditions to be satisfied in situations where manufacturer can avail credit in respect of expenses incurred in relation to the sale of the excisable goods upto place of removal: (i) The ownership of the goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his doorstep. (ii) The seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) The freight charges were an integral part of the goods 4.17 She further submits that in the present case, the appellant satisfied all these three conditions. The ownership and risk of the goods remains with the appellant till the delivery of goods at the customer's premises. This is also evident from the purchase orders. This issue has also been settled in favour of the assessee in the following judgments: a) Commissioner of Central Excise vs. M/s Manglam Cement Ltd. - 2018 (9) G.S.T.L. 17 (Raj.), maintained by the Supreme Court in Commissioner vs. Manglam Cement Ltd. - 2018 (16) G.S.T.L. J168 (S.C.)] b) M/s JSW Steel Ltd vs. Commissioner of Central Excise, Customs and S....
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...." means any service, - (i) used by a provider of output service for providing an output service, or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal" From 01.04.2008 to 31.03.2011 "input service" means any service, - (i) used by a provider of output service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clea....
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....hat this service is not used in relation to the manufacture of the product and the cost of the same has been recovered from the employees. Rent a cab service has been mainly used for official purposes and the same relates to the business of the appellant and is covered by the ratio of decisions cited supra. Here, we may note that a part of the cost of this service is recovered from the employees and as per the appellant, only 20% of it, is recovered from the employees and the same has been reversed along with interest and 80% is absorbed in the manufacturing cost. Accordingly, we hold that the appellant is entitled to avail 80% of the cost of this service and the Original Authority is directed to verify the quantum of Cenvat Credit reversed by the appellant as claimed by them. On principle, we hold that the appellant is entitled to avail Cenvat Credit on this service as has been held so in the decisions relied upon by the appellant cited supra. 8.3 Outdoor Catering (Canteen) Service : Cenvat Credit has been denied on account of the fact that it is not related to the manufacture of the product and the same is recovered from the employees. In this regard, we find that it is a stat....
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....nd accumulate them at its head office and distribute the said credit to its various units. At the time of distribution, the manner of distribution is provided in Rule 7 which reads as under :- "Manner of Rule 7. distribution of credit by input service distributor. - The input service distributor may distribute the CENVAT credit in respect of the service tax paid on the input service to its manufacturing units or units providing output service, subject to the following conditions, namely :- (a) the credit distributed against a document referred to in rule 9 does not exceed the amount of service tax paid thereon, or (b) credit of service tax attributable to service use in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services shall not be distributed." Therefore, only two limitations are put for the distribution of credit by an input service distributor. Firstly, it cannot exceed the amount of service tax paid and secondly, the credit of service tax attributable to service used shall not be distributed in a unit exclusively engaged in the manufacture of exempted goods or providing of exempted services. ....
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....lant cited supra. Hence, we hold that the appellant is entitled to Cenvat Credit with regard to these services. 8.5 C&F and Cargo Handling Service : As regards C&F and Cargo Handling Service, we find that the learned Commissioner in the impugned order has denied the Cenvat Credit on the main ground that said services were used by the head office beyond the place of removal i.e. the factory gate of the appellant's unit and secondly, the said services pertain to post manufacture activities and therefore, Cenvat Credit is not permissible. In this regard, we may note that the definition of 'place of removal' as provided under Section 4(3)(c) of the Act inter alia includes depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory. Further, we find that C&F and Cargo services are used for the purpose of unloading, storing, accounting and thereafter dispatch of the goods to the specified dealers on 'FOR' basis. In this regard, the learned Counsel for the appellant also referred to certain invoices issued by the appellant to prove that all the goods were supplied 'FOR' upto the place of....