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M/s Maruti Suzuki India Ltd. Versus CCE, Delhi-III (Vice-Versa)

2016 (10) TMI 648 - CESTAT CHANDIGARH

Denial of CENVAT credit - construction service - input service - Rule 2(l) of the Cenvat Credit Rules, 2004 - Held that: - reliance placed on the decision of Suzuki Motorcycle (I) Pvt. Ltd Versus Commissioner Central Excise [2011 (2) TMI 56 - CESTAT NEW DELHI] - the denial of credit on construction service to the appellant is not legally sustainable as the period involved is prior to amendment in Rule 2(l) made on 01.04.2011. - Architect service availed by them in connection with project pla .....

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is only an indicator to show the legal necessity of such insurance to the employees. In terms of the contractual arrangement, the appellant have to take such insurance cover for the Japanese employees. Prior to amendment of the cenvat credit Rules in 2011 there is no specific bar/exclusion in the definition. Accordingly, the appellants are entitled for credit on service tax paid on life insurance during the material period. However, such credit shall not be available in respect of medical claim .....

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f the appellants and cannot be considered heaving any nexus to sustain their eligibility. Such employment benefit not having nexus with the activities of the appellant and cannot be covered under the category of input services. Reliance placed on the decision of Mahindra & Mahindra Ltd Versus Commissioner of Central Excise [2015 (6) TMI 407 - CESTAT MUMBAI]. - Time bar - Held that: - as all credits taken have been recorded and reported in the prescribed returns, the appellants are correct in .....

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anufacture and sale of the final products by the appellant/assessee. The service tax paid towards accommodation of these experts are rightly covered by the ‘input service' in terms of Rule 2(l) of Cenvat Credit Rules, 2004 - credit eligible. - CENVAT credit allowed on all services except on family insurance and club services availed by Directors - The demand on these credits is restricted to normal period - penalties set aside - appeal dismissed - decided against Revenue. - E/60198, 60199, 6 .....

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l by Revenue against the same order. 2. The dispute in all the present proceedings are with reference to the appellants eligibility for cenvat credit of service tax paid on four types of activities. 3. We have heard both the sides and perused the records. The impugned order denied cenvat credit of ₹ 28,32,73,936/- availed by the appellants under the various categories of input services. Substantial portion of this credit relates to construction service. The appellant submitted that they ha .....

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ning the definition of services' held that in respect of manufacturer, input service should be seen in the context of their relation directly or indirectly to the manufacture and clearance of final products. He held that the construction service received by the appellants resulted in the creation of capital asset which are immovable properties and hence there is no nexus between the inputs service' and the manufacturing activity. We note that the original authority has erred in applying .....

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a Auto Components India Pvt. Ltd. reported in 2015-VIL-300-P&H-ST. The Hon'ble High Court upheld the decision of the Tribunal reported in 2014-TIOL-430 CESTAT, Delhi. In this case the assessee is found to be eligible for cenvat credit in relation to service tax paid for setting up of the factory. Reference can also be made to the decisions of this Tribunal in the case of Lingong Indian Pvt. Ltd. 2015 (38) STR 96 (Tri. Del.), YKK India P. Ltd. 2013 (30) STR 200 (Tri. Delhi) and Suzuki Mot .....

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the factory. We find applying the above reasoning, the said services are covered within the definition of service' under Rule 2(l) of the Cenvat Credit Rules, 2004. Denial of credit is not justifiable. The Tribunal allowed such credit as eligible in the case of Pepsico India Holdings Pvt. Ltd. 2012-TIOL-2045-(CESTAT-Bang) and Bharat Fritz Werner Ltd, 2011 (22) STR 429 (Tri. Bang). We find no merit in the impugned order on this issue. 5. The Cenvat Credit has been denied to the appellants for .....

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ally tenable during the material period. Statutory obligation is only an indicator to show the legal necessity of such insurance to the employees. We find in the present case in terms of the contractual arrangement, the appellant have to take such insurance cover for the Japanese employees. We find prior to amendment of the cenvat credit Rules in 2011 there is no specific bar/exclusion in the definition. Accordingly, we find that the appellants are entitled for credit on service tax paid on life .....

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rt of their employment benefit as such has no direct nexus with the manufacturing activity of the appellant. Such services are far removed from the activities of the appellants and cannot be considered heaving any nexus to sustain their eligibility. Such employment benefit not having nexus with the activities of the appellant and cannot be covered under the category of input services. Reference can be made to Tribunal decision in Mahindra & Mahindra Ltd. 2015 (39) STR 316 (Tri. Mumbai) and H .....

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it Rules, 2004. No mala-fide intention can be attributed to the appellant in availing such credits. There is no case for suppression of fact. The definition of Input Services' in Cenvat Credit Rules, 2004 itself has undergone many changes, even with reference to credit on insurance service etc. As all credits taken have been recorded and reported in the prescribed returns, we find that the appellants are correct in contesting the case for extended period, We find there is no merit in invokin .....

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