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2015 (1) TMI 505 - AT - Service TaxDenial of CENVAT Credit on Input Service - quality control services / Business Auxiliary Service - Reverse Charge Mechanism - Nexus with manufacturing activity - service activity was rendered outside India, outside the place of removal of excisable goods - whether service tax paid by the respondent as recipient of service under Section 66A of Finance Act is eligible to be taken as cenvat credit under CCR 2004 during the period of dispute viz. March 2007 to July 2007 - Held that:- respondent is a 100% EOU for manufacture and export of Rear Axels Housing which is classifiable under CH 87089900 of CETA'85 as motor vehicle parts. These goods are manufactured by the respondent as per the design and specification provided by the buyer. These Rear Axles Housing are used in the assembly/ manufacture of motor vehicle at the buyer's end. The respondents have carried out the activities of removing the rust developed during transit, deburring of certain machined area of axels and also cross checking of dimensions. I find that they engaged a Overseas service provider to carry out these activities at buyer's premises at USA. As seen from the SCN, and the adjudication order the only ground on which the service tax credit was denied is that services were rendered outside the place of removal of goods from the factory premises which is in the nature of post-removal activities. Respondents have availed the services of overseas service provider to carry out quality control activity on Rear Axle Housings at buyer's premises. Appellant being 100% EOU, they have secured orders for fulfillment of export obligation. Being manufacturer of Rear Axles Housing (Motor Vehicle parts), as per the drawing, design and specifications of the overseas buyer, the respondents have to ensure that the activities viz. removal of rust, deburring, quality control checking are done at buyer's premises. If the respondent do not satisfy the quality of the parts manufactured by them, and if it results in rejection, certainly, it will be a loss to his business. Therefore, these activities are related to quality control and in relation to the business of the respondent. Therefore, I am of the considered view that the said services availed by the respondents from the overseas service provider are rightly covered in the inclusive definition of "input services" defined under Rule 2 (l) of CCR 2004. - Following decision of Coca-cola India (P) Ltd. [2009 (8) TMI 50 - BOMBAY HIGH COURT] and CCE Vs Nilkamal Crates & Bins [2010 (2) TMI 232 - CESTAT, AHMEDABAD] - Decided against Revenue.
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