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2023 (5) TMI 754 - CESTAT MUMBAIDenial of CENVAT credit of tax - input services - construction service - security service - maintenance and repair service - works contract service - manpower recruitment and supply service - denial on the ground of lack of nexus - HELD THAT:- It would be appropriate to hold that perception of ‘nexus’, with its unbounded connotations, is not an appropriate nomenclature for the touchstone intended by rule 3 of CENVAT Credit Rules, 2004; conformity must need be tested against the entirety of the definition of ‘input service’ in rule 2(l) of CENVAT Credit Rules, 2004 including the principal and inclusive leg on every finding of denial. Our perusal of the order of the original authority supra reveals that the principal leg has been accorded but a cursory disposal. From a plain reading of the germane definitions in CENVAT Credit Rules, 2004, we also find that the distinction drawn between ‘input’ and ‘input service’ for deploying the expression ‘whether directly or indirectly’ also appears to have been overlooked by central excise authorities. The relevance of the expression in the latter, by reason of intangibility and solely for manufacturing entities, is crucial enough to be the essence of the test for conformity to the definition - the principle of ‘nexus’ of ‘service’ should not, therefore, restrict itself to ‘direct use’ but should encompass ‘indirect’ deployment and, hence, should be examined also in relation to the main leg of the definition. The lack of finding in the impugned order on the applicability of the main leg of the definition and its nexus with the final output hinders the exercise of appellate determination. It would be appropriate to have that undertaken to enable which we set aside the impugned order and restore the proceedings before the original authority to take note of the submissions of the appellant herein on the direct/indirect use of the impugned services procured by the appellant and determine nexus or lack thereof. Accordingly, the appeals are allowed by way of remand.
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