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2013 (11) TMI 1260 - AT - Service TaxStay application - CENVAT Credit - Whether assessee is entitled for input service credit for services rendered by them such as works related to cane development, cleaning of yard, cane supply work, cane or planting by tractor, labour for cane area survey - Held that - stated service have been provided to the party either for welfare of sugarcane growers or works related cane cultivation and welfare measures. Any service provided for welfare of sugarcane grower and sugar cultivation is only to improve the condition for growing sugar and directly or indirectly has no concerns with manufacture of their final products - it is clear that these activities do not fall under the definition of service and are not eligible for input service credit - Prima facie case not in favour of assessee - Stay denied.
Issues:
Whether M/s Mawana Sugars Mills are entitled to input service credit for services related to cane development, cleaning of yard, cane supply work, cane planting by tractor, and labour for cane area survey. Analysis: The judgment by Sh. Manmohan Singh of the Appellate Tribunal CESTAT NEW DELHI dealt with a stay application by M/s Mawana Sugars Mills regarding their eligibility for input service credit for various services provided. The key issue was whether the services in question fulfilled the definition of input service as per rule 21 of the Cenvat Credit Rules 2004. The definition includes services used directly or indirectly in the manufacture of final products, setting up or renovation of factories, market research, procurement of inputs, and other specified activities related to the business. The contention was that the services provided to M/s Mawana Sugars Mills, such as works related to cane cultivation and welfare measures for sugarcane growers, did not fall under the definition of services eligible for input service credit. The tribunal noted that the services in question, aimed at the welfare of sugarcane growers and cane cultivation, were not directly or indirectly related to the manufacture of final products by M/s Mawana Sugars Mills. As such, these activities did not meet the criteria for input service credit as defined in the relevant rules. The judgment highlighted that the services provided were not covered under any of the services specified in section 65 of the Finance Act 1994. Therefore, the tribunal concluded that M/s Mawana Sugars Mills had not established a case for waiver of pre-deposit in relation to the input service credit claim. Consequently, the tribunal ruled that the application for waiver of pre-deposit by M/s Mawana Sugars Mills was not maintainable. The appellant was directed to deposit a specified amount within a set period, failing which compliance measures would be enforced. The order was pronounced in an open court session on a specific date, outlining the decision regarding the deposit requirement. The judgment provided a clear analysis of the eligibility criteria for input service credit and the specific services in question, ultimately determining that the services did not qualify for the credit based on the established legal framework.
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