2017 (1) TMI 16 - AT - Central Excise

Refund of unutilized cenvat credit - credit on Car Rentals CHA Service Chartered Accountant Courier Travel Agency Professional fees Goods Transport Service Machine Maintenance Bank Charge Service Security Service Goods Testing - denial on the ground that the said services are not used in the manufacture of final products - Held that - there is nothing wrong in the impugned order allowing refund of unutilized accumulated cenvat credit of input services. The original authority has allowed cenvat credit after proper verification of the records of the respondents and all these services on which credit has been availed have been held to be input services - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeals against Commissioner (Appeals) order dismissing Revenue's appeals for refund of unutilized cenvat credit.

Analysis:
The Revenue filed 10 appeals against the Commissioner (Appeals) order dismissing their appeals for refund of unutilized cenvat credit. The original authority had sanctioned a refund of &8377; 14,95,037/- but disallowed a portion of the claimed amount. The Revenue contended that the services for which the refund was granted did not qualify as 'input services' under Rule 2(l) of the Cenvat Credit Rules. They argued that only services directly or indirectly used in manufacturing export goods are eligible for refund, not all services by nomenclature. The Revenue claimed that the lower authority did not verify the usage of the services as input services and that business activity expenses are distinct from manufacturing activity expenses.

The respondent defended the impugned order, citing a specific finding by the Appellate Authority that the services in question were indeed used in the manufacturing process. The Commissioner (Appeals) observed that the services like CHA service, Goods Transport Service, Machine maintenance, Goods testing, chartered accountants, courier services, and security services were covered under the definition of 'input service.' The Commissioner (Appeals) noted that the lower authority had verified the eligibility of the services before granting the refund, concluding that the services were used in relation to manufacturing finished goods and day-to-day business activities. The respondent relied on various case laws to support their argument that all services related to the business of manufacturing the final product are considered 'input services.'

After reviewing the submissions, records, and case laws cited, the Tribunal upheld the impugned order allowing the refund of unutilized accumulated cenvat credit of input services. The Tribunal found that the original authority had properly verified the records and held that the services for which credit was availed qualified as input services based on the cited judgments. Consequently, the Tribunal dismissed the Revenue's appeals, finding no infirmity in the impugned order. The operative portion of the Order was pronounced in Open Court on 17/11/2016.