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2016 (10) TMI 676 - CESTAT NEW DELHI

2016 (10) TMI 676 - CESTAT NEW DELHI - TMI - Denial of CENVAT credit - manufacture of motor vehicle chassis - availing various input services in or in relation to the manufacture of final products - whether the appellant eligible for credit of these input services? - Held that: - the decision taken in the appellant's own case M/s Eicher Motors Limited Versus CCE, Indore [2016 (8) TMI 7 - CESTAT NEW DELHI] have been relied where it was held that the denial of credit on these services is not justi .....

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he Valuation Rules. However, no credits shall be eligible for the services rendered beyond the place of removal (depot) as these Business Support Services are basically for movement of excisable goods as submitted by the appellants. - Denial of CENVAT credit not justified - appeal allowed - decided in favor of appellant. - Excise Appeals Nos. 251, 250, 387 and 388/2010-EX(DB) - Final Order Nos. 54062-54065/2016 - Dated:- 7-10-2016 - Shri S.K. Mohanty, Member (Judicial) And Shri B. Ravichandr .....

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icle chassis liable to central excise duty. The appellants are clearing the motor vehicles chassis to the job worker on payment of central excise duty as applicable. The job worker manufactures body on the chassis and clears the same on payment of central excise duty as applicable. The appellants were availing various input services in or in relation to the manufacture of final products. The present dispute relates to eligibility of the appellants for credit on these input services. Proceedings .....

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t Services (x) Event Management Services (xi) Foreign Consultancy Services (xii) Insurance Services (xiii) Mandeep Keeper Services (xiv) Market Research Services (xv) Real estate Services (xvi) Repair & Maintenance (xvii) Security Services (xviii) Telephone, Tours & Travel Services 3. The Original Authority in the impugned orders disallowed the credit on various services except service tax paid on consultancy charges and foreign consultancy charges. The main reason quoted in the impugned .....

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ed above are having direct nexus with their activity of manufacturing excisable goods and their activity and business of manufacturing and marketing of excisable goods and as such, these are correctly claimed as credits. 5. Submissions made by the ld. Counsel can be summarized as below:- (a) The inputs services in dispute are used in or in relation to the manufacture of final products. Therefore, these are covered by the means part of the definition of input services. (b) Even otherwise, these i .....

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and marketing of the excisable goods. Large number of case laws were also cited in support of the claim in respect of each one of the input service. 6. Ld.AR contested the appeals stating that the Original Authority has examined the matter in detail and denied the credit accordingly. He reiterated the findings of the Original Authority in the impugned orders and submitted that these appeals are liable to be rejected. 7. We have heard both the sides and perused the appeal records. 8. We find that .....

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r s premises who clears such vehicle on payment of duty. The vehicle cleared by the job worker factory is transferred to the depot of the appellant from where the sale of vehicle is effected to independent buyers. The following services have been denied the benefit of cenvat credit in the impugned order for the reason that these services have been used in relation to complete vehicles whereas the appellant is a manufacturer only of chassis. i) Advertisement Agency Services ii) Market Research ii .....

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research etc. availed by the manufacturer of concentrate for soft drinks. In that case Coca Cola India who manufacture concentrate was allowed to utilise the credit on various services which were used for marketing of the soft drinks which was ultimately manufactured and cleared by the bottlers. The Hon ble High Court took the view that all such activities relating to business are covered under input service provided there is relation between manufacture of concentrate and such activity. The Ho .....

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vice and the manufacture of the final product. .. Once the cost incurred by the service has to be added to the cost and is so assessed, it is a recognition by Revenue of the advertisement services having a connection with the manufacture of the final product . On the admissibility of advertisement services, the appellant has also relied on the following case laws: * CCE vs. HCL Technologies Ltd. -2016 (42) STR 48 (Tri. Del.) * Greaves Cotton Ltd. vs. CCE, Chennai-II & IV-2015 (37) STR 395 (T .....

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UG Sugar & Industries Ltd. vs. CCE 2016-TIOL-1255-CESTAT-ALL * Gujarat Reclaim & Rubber Products Ltd. 2013 TIOL-509-CESTAT-Mad. (ii) The service tax paid on telephone, tours & travel services stand disallowed in the impugned order also for the reason that such services have been availed in the regional office and have also been provided to the employees of the appellant in Regional offices, guest house and depots. We find that in addition to the decision in the Coca Cola India case, .....

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d employee seminar etc. We find that such services have been specifically allowed as input services in the following decisions: * Maruti Suzuki India Ltd. vs. CCE 2015-TIOL-1889-CESTAT-DEL * Shree Cement Ltd. vs. CCE- 2014 (36) STR 1107 (Tri. Del.) * J.P. Morgan Services (I) Pvt. Ltd. vs. CCE -2016 (42) STR 196 (Tri. Mum.) (iv) Commission agent service for sales of the complete vehicle have been specifically allowed in the case of Carrier Airconditioning & Refrigeration ltd. vs. CCE 2016 (41 .....

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have been paid for BRC charges, CBC handling charges etc. have been disallowed in the impugned order as post manufacturing activity. But we find that such charges stands allowed in the cases MPI Machines Ltd. vs. CCE, Indore -2013 (31) STR 103 (Tri. Del.) and Meghmani Dyes & Intermediates Ltd. vs. CCE, Ahmedabad 2013 (32) STR 671 (Tri. Ahmd.). (vi) Security Agency Service used at regional offices also stands specifically allowed in the case of National Engineering Industries Ltd. vs. CCE, Ja .....

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nsurance Service * Courier Services * Repair & Maintenance Service * Real Estate Service * Canteen Service (i) We find that life insurance service on premium paid for employees have been held as allowable in the case of Reliance Industries Ltd. vs. CCE&ST, Mumbai 2015 (38) STR 217 (Tri. Mumbai). (ii) Courier services used for getting DEPB, DEEC, EPCG Schemes permissions etc. have been allowed in Meghmani Organics Ltd. vs. CCE, Ahmedabad 2012 (26) STR 555 (Tri.). (iii) Repair & mainte .....

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wable in CCE vs. L&T Valves Ltd.- 2016-TIOL-750-HC-MAD-ST. 9. As discussed above, we find that all the services for which credit have been claimed under Rule 2(l) of the Cenvat Credit Rules, 2004 already stand allowed in various decisions. Hence, these issues are no longer res-integra. Respectfully, following the above decisions, we set-aside the impugned order and allow the appeal. 9. In view of the above findings by the Tribunal in the appellant s own case, we find that the denial of credi .....

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are allowed to take credit of tax paid on inputs supplied/received by them. If therefore Cenvat is denied to the input service received by the assessee as in the present case, they will become burden to the assessee, which is against the very grain or principle of VAT being a consumption tax. 38. Service tax therefore, paid on expenditure incurred by the assessee on advertisements sales promotion, market research will have to be allowed as input stage credit more particularly if the same forms .....

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to the following five categories, in so far as a manufacturer is concerned : (i) Any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products (ii) Any service used by the manufacturer whether directly or indirectly, in or in relation to clearance of final products from the place of removal (iii) Services used in relation to setting up, modernization, renovation or repairs of a factory, or an office relating to such factory, (iv) Ser .....

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d be available. This would be so even if the assessee does not satisfy other limb/limbs of the above definition. To illustrate, input services used in relation to setting up, modernization, renovation or repairs of a factory will be allowed as credit, even if they are assumed as not an activity relating to business as long as they are associated directly or indirectly in relation to manufacture of final products and transportation of final products upto the place of removal. This would follow fr .....

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a separate and distinct head of exemption. Whenever a question arises as to whether any particular category of an income of a co-operative society is exempt from tax what has to be seen is whether income fell within any of the several heads of exemption. If it fell within any one head of exemption, it would be free from tax notwithstanding that the conditions of another head of exemption are not satisfied and such income is not free from tax under that head of exemption. [Emphasis supplied] 10. .....

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ng the full manufactured commercial vehicles to their various dealers /distributors and earned commission for such activity. The credit on such services was denied by the Revenue on the ground that the appellants are manufacturing in their unit chassis of vehicles, whereas what they are selling is complete vehicle, which is manufactured in the factory of job worker. The various services obtained by the appellant are in relation to the promotion and marketing of vehicles, which the appellants are .....

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e premises of the body builders to the depot of the appellant and for transportation of the vehicles from depot to the premises of the customers, as the case may be. The said service providers have raised invoices on the appellants for the said support services along with any service tax payable thereon. The appellants have paid service tax to the respective service providers. These facts were not disputed. We note that in the present case, the appellants are not claiming tax credit on the trans .....

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er, in Audi Automobiles - 2010 (249) ELT 124 (Tribunal-Delhi), the Tribunal held that when the appellants are fabricating and mounting the bodies of buses and trucks on the chassis manufactured by M/s. Eicher Motors Limited /Tata Motors Ltd., it was held that Rule 10 A provides for method of valuation for the purpose of deciding excise duty in respect of the goods manufactured by the job worker and the provisions clearly defines the term job worker . In the present case, the appellants are manuf .....

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