TaxTMI 
TaxTMI 
2024 (7) TMI 683
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....Delhi, Regional Operations Divisions and International Operations Division at New Delhi. These were called by the appellant as "Cost Centres", which had obtained Input Service Distributor for distributing the input service credit. The appellant had availed credit of service tax on the invoices issued by these Cost Centres (ISD invoices). The department was of the view that the services availed by the appellant on the invoices distributed by the ISD do not have any nexus with the manufacturing activity of the appellant, and therefore is not eligible for credit. The various input services under dispute are as under: - 3. Maintenance or Repair Service, Advertising Agency Service, Telecommunication Service, Professional Charges for Patents, Renting of Immovable Property, Man Power Recruitment / Supply Agency services, Technical Testing Service, Air Travel Agent Service, Courier Service, Software Development, Goods Transport Agent Service, Legal Consultancy Service, Information Technology Software Service, Packaging Service, Erection, Commissioning or Installation Service, Security Agency Service, Business Auxiliary Service, Scientific or Technical Consultancy Service, Commercial Tra....
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....2014 and proposing to recover the same along with the interest and for imposing penalties. After due process of law, the original authority disallowed the credit and confirmed the demand along with interest and imposed penalty of Rs.20,00,000/- under Rule 15 (1) of Cenvat Credit Rule 2004. Aggrieved by such order, the appellant is now before the Tribunal. 7. The Ld. Counsel Ms. S. Sridevi, appeared and argued for the appellant. It is submitted that the period involved is from September 2013 to July 2014 which is the period after the major amendment to the definition of Input Services. The Ld. Counsel referred to the definition of input service under rule 2 (l) of Cenvat Credit Rules 2004 for the disputed period which reads as under:- As per Rule 2(1) of CENVAT Credit Rules, 2004 RULE 2(1): Input Services "Input Service" means any service,- (i) used by a provider of output service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products, up to the place of removal, and Includes services used in relation to modernizati....
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....as per rules laid down in terms of Rule 7 of Cenvat Credit Rules 2004. The appellant has 4 Cost Centres which are registered as input service distributors. The appellant has availed credit only through the invoices issued by these input service distributors. The provision for registering as an input service distributor is to facilitate procurement of credit on services centrally and for distribution to various units. These units use the services directly or indirectly with the manufacturing activity or for providing taxable output service. All the services received has a nexus with the manufacture and clearance of final products of the manufacturing units and erection divisions. The payments for procuring the input services which were commonly utilized by all the units were maintained by the Cost Centres registered as an ISD. These Cost Centres having registered as ISD has distributed the credit which qualifies as an input service in terms of Rule 2 (l) of Cenvat Credit Rules 2004, these Cost Centres are subject to verification and audit by their jurisdictional officers. These ISDs are also liable to file periodical returns which are subject to the scrutiny by their jurisdictional ....
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....ccommodation service, was under dispute in the said show cause notice. The original authority, after considering the submissions of the appellant vide O-I-O No.20/2022 dated 30.03.2022 held that the credit is eligible and dropped the entire proceedings in respect of show cause notice C. No. IV/16/102/2013- Adj. dated 24.09.2013. similarly, the proceedings initiated vide show cause notice dated 17.04.2006 on issue of availing credit on certain input services was dropped by original authority vide O-I-O No.29/2022 dated 03.06.2022 (period is March 2005). 15. It is submitted by the Ld. Counsel that the disallowance of the credit is without any legal or factual basis. It is prayed that the appeal may be allowed. 16. The Ld. AR Shri. N. Satyanarayanan, appeared and argued for the department. It is argued that the appellant has to establish that the services are used directly or indirectly for manufacturing activity. The credit has been correctly disallowed by the adjudicating authority. It is prayed that the appeal may be dismissed. 17. Heard both sides. 18. The only allegation raised in the show cause notice to disallow input service credit is that the appellant has not est....
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....ssed by the Tribunal in other appeals applies to the issue of eligibility of credit on the disputed input services. 24. In respect of outdoor catering services, it is seen that the services have been availed prior to 01.04.2011. So, also in the case of works contract services/ civil work these are availed for repair and maintenance as well as modernization and not of setting up of a factory. There is no allegation by the department that such civil works were availed for setting up of a factory. 25. We find that all the services are eligible input services. The credit cannot be denied on such vague allegations at the end of the manufacturing unit without disputing the credit availed by the input service distributor. For these reasons we find that the impugned order cannot sustain. 26. In the result the impugned order is set aside. The appeal is allowed with consequential reliefs, if any. ( Order pronounced in the open court on 11. 07. 2024 ) ============= Document 1 S.No. Nature of service 1 Repairs Maintenance Reason for Appellant's disallowance submission of credit and Repair services It is an inclusive in respect of definition. It....
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....velopment for monitoring day to day affairs such as order monitoring, due date of delivery, realizing of pending payment, invoice/PO templates 03.06.2022 and other decisions in Page 189 to 191) Manatec Electronics 2017(47) STR 239 (Tri Chennai) and Integra Software 2017(50) STR 145 (Tri Chennai) Manpower for office Wipro Ltd., 2014- 4 Manpower No evidence to recruitment supply prove that they service are used in or in relation manufacture (Page 63 & 64) Definition of excludes, to The employed manpower is working directly or indirectly in or in relation to works/factory manufacture only Exclusion is only TIOL-2554-CEST- MAD 5 Erection, Installation of GE India commissioning installation of service portion services, generators, in works civil structure. Covered by functioning etc, essential UPS, etc. contract service (Page 64) earlier order of office/factory the Tribunal. with reference to servers/generator/Ups Technology-2014- of CESTAT- BANG (197-199) Assessee own for TIOL-1931- case ....
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....es for bills handlings in Assessee own case in ΟΙΟ 21/2022 dt covered in the definition. 13 Cable service operator Cable connection in office (Page 68) Covered by the main part of the definition reproduced in (1) above. Cable connection in office/conference to remain updated with business news and development which is essential for efficient output 31.3.2022; MPI Machines 2013(31) STR 103 (page 211) FO Assessee own case in 42996/2018 5.12.2018 dt 14 Accommodation and convention service Not pertaining to Ranipet (Page 68) credit. in For conduction Annual Assessee General own case in FO 42996/2018 dt 5.12.2018 Covered by earlier order of the Tribunal. ISD Remanded the earlier order of the Tribunal. But in the impugned order the finding is different. 15 Share Transfer agent Finding in page Covered in the service of 18 of the order/definition Page 69 of the input service paper book (Page 69) 16 Membership Service Excluded from Not excluded.. ....