TaxTMI 
TaxTMI 
2025 (2) TMI 588
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....ENVAT Credit along with penalty of equivalent amount under Rule 15 (2) of CENVAT Credit Rules,2004 [CCR, 2004] read with Section 11 AC(1)(c) of Centrals Excise Act, 1944 [The Act, 1944]. 2. The appellant is engaged in the manufacture of "Condenser Coils, Evaporative Coils and Air Conditioners". During the course of audit, it was observed that the appellant had wrongly availed CENVAT Credit of service tax paid on ineligible input services during the period, April 2015 to March 2016. Show cause notice dated 20.09.2017 was issued to the appellant invoking the extended period of limitation. By order-in-original dated 3.05.2018, the demand of Rs.80,95,227/- along with interest and penalty was confirmed. The appeal filed by the appellant was d....
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....e] 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 upto the place of removal, and includes services used in relation to 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, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital good....
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....nal use or consumption of any employee;] [Explanation. - For the purpose of this clause, sales promotion includes services by way of sale of dutiable goods on commission basis.] 6. The appellant was manufacturing at their Bhiwadi Unit LED TV, Condenser Coils, Evaporatire Coils and Air Conditioners for Railways only whereas CENVAT Credit of Rs.73,56,722/- was availed in respect of service tax paid for advertising of the air conditioners meant for domestic purpose, which were manufactured at another unit of the appellant. That CENVAT Credit of service tax paid on advertisement service can be availed only in terms of Rule 2(l) of CCR. The findings of the Adjudicating Authority in this regard are: "The Assessee was not manufacturing....
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....nufacture of final products as well as the business of manufacture of final product would qualify to be input service under Rule 2(l) of 2004 Rules. Following the decision of the Bombay High Court, the majority decision in Telco Construction Equipment Co. Ltd. Vs. C.C.E. & CUS., Belgaum [2013 (32) STR 482 (Tri. -Bang.)] also held that the assessee is required to establish integral connection between the service and the business of manufacture of final product for the benefit of CENVAT Credit on the service. The Tribunal in Dai Ichi Krakaria Ltd. Vs. Commissioner of Central Excise, Pune-I [2015 (40) STR 275(Tri. Mum.)] dealt with the input service on which the credit taken were mostly directly related to the manufacturing activities at Pune ....
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....uction services and service of foundation or making of structure for support of capital goods as well as 'tour operator service' have been mentioned under the exclusion clause of the definition of "input service" definition. Hence, the appellant is not entitled to avail the CENVAT Credit on the said amount. 10. Lastly, the Credit of service tax of Rs.91,492/- taken in respect of invoices, which are not in the name of the assessee is clearly not admissible. Rule 9 of CCR prescribes the documents for availing the credit, which reads as under:- "RULE 9. Documents and accounts. - (1) The CENVAT Credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on th....