TMI Blog2018 (7) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to avail Cenvat credit on input services which have been availed by them in the course of their business of manufacturing excisable goods as per the decision of Hon’ble Bombay High Court in the case of CCE, Nagpur vs. Ultra Tech Cement Limited [2010 (10) TMI 13 - BOMBAY HIGH COURT] - the assessee is entitled to avail Cenvat credit of ₹ 7,19,438/-. Management consultancy and Tax consultancy - Held that:- The said services availed by the assessee are legal in nature and the same form inclusive part of definition of input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004 - Credit allowed. Insurance for finished goods and Inputs - Held that:- Assessee has opted insurance for their finished goods and inputs. Until and unless the goods are insured, in the event of any unforeseen accident wherein the finished goods or inputs destroyed before clearance from the place of removal, the said activity is attributable to the manufacturing activity of the assessee - credit allowed. Insurance of employees family members - extended period of limitation invoked for denial of credit - Held that:- Extended period of limitation is not invokable for denial of Cenvat credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction organised by the assessee, in the factory premises, for enjoyment of the employees, they are entitled to avail Cenvat credit - credit allowed. Penalties - Held that:- As, on merits the assessee is entitled to avail Cenvat credit, therefore, no penalty is imposable on the assessee in the facts and circumstances of the case - penalties are set aside. Appeal allowed by way of remand. - Appeal No. E/58530,58677/2013, E/50706/2015, E/257/2016-DB - A/62467-62470/2018-EX[DB] - Dated:- 24-5-2018 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technical) Shri Puneet Bansal Ms. Sneha Ghose Advocates for the Appellant(s) Shri Vijay Gupta, A.R. for the Respondent(s) ORDER Per: Ashok Jindal Both sides are in appeal against the impugned orders. 2. The issue involved in the matter is availment of Cenvat credit on various services during the period April 2006 to March 2015. As the issue is common in all the appeals therefore, all the appeals are disposed of by a common order. 3. The appellant is manufacturer of self adhesive film and self adhesive paper. During the course of their manufacturing activity they procured various ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to avail Cenvat credit. We find that the nature of services availed by the assessee under the said head is described as under:- S. No Nature of services as described in the intercompany service agreement Clauses under the intercompany service agreement Clause under the definition of input service 1 Promotional materials Marketing Advertisement or Sales Promotion 2 Advertising bulletins with art- work, design, advertising copy and co-ordination with products Marketing Advertisement or Sales Promotion 3 Market research and information on sales trends and/or competitive products and market shares Marketing Market Research 4 Reports on regional and local market surveys and Marketing Marketing Market Research 5 Marketing planning, field sales direction, including help with key accounts Marketing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment program to secure availability of executives Labour Law and Employee Relations Recruitment 20 Assistance in internal plan formulation and analysis Financial Services Financing 21 Assistance in internal financing reviews Financial Services Financing 22 Advice and assistance on insurance programs Financial Services Financing 23 Assistance in matters pertaining to corporate taxes, indirect taxes and customs duties Financial Services Legal 24 Assistance in cash funding, financing and other treasury activity Financial Services Financing 25 Assistance in customer applications of commercial products Product Development and Research Market Research 26 Assistance in defining market needs Product Dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under activities related to business. Noticee is receiving services of Management Consultancy and has contended that these services are received by them for increasing the efficiency of the business, manufacturing and other aspects relating the business of the assessee. I find that in Commissioner of C. Ex., Hyderabad-IV vs. Deloitte Tax Services India Pvt. Limited 2008 (11) STR 266 (Tri. Bang.) the Tribunal has held that professional consultancy services would come under the definition of input services and the credit on the same should be allowed. Therefore, I hold that these services are input services under activities relating to business, finance, audit, accounts and quality control, Cenvat credit on the aforesaid services cannot be denied. We do agree with the adjudicating authority in the earlier order and on merits, we have examined the issue and we found that these services are in inclusive part of definition on input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004, therefore, we hold that assessee is entitled to avail Cenvat credit of ₹ 2,09,34,959/- and ₹ 51,94,595/- (b) Business Exhibition service : We find that Revenue is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ground that same is not relating to manufacturing activity of the assessee. We find that assessee has opted insurance for their finished goods and inputs. Until and unless the goods are insured, in the event of any unforeseen accident wherein the finished goods or inputs destroyed before clearance from the place of removal, the said activity is attributable to the manufacturing activity of the assessee. In that circumstance, we hold that assessee is entitled to avail Cenvat credit of ₹ 4,13,645/-. We also take note of the fact that for the period April 2011 to March 2012, in the earlier order, the adjudicating authority allowed Cenvat credit to the assessee but for the subsequent period, the adjudicating authority has been challenging the same without assigning any reason and contradicting the earlier order. In that circumstance also, the assessee is entitled to avail Cenvat credit on the said service. (e) Insurance of employees family members : The Revenue is in appeal for allowing of Cenvat credit of ₹ 3,17,791/- pertaining to insurance of family members of employees of the assessee for that they are not entitled for Cenvat credit. The contention of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r services that remotely or in a roundabout way contribute to the manufacture of the final products; that any and every connection however remote and indirect it may be is not contemplated by the definition of input service and that a line has to be drawn somewhere to avoid undue extension of the phrases directly or indirectly and in or in relation to by adopting a common sense approach. Immovable property is neither service nor goods and, therefore, input credit cannot be taken. Although civil construction work is a taxable service under the Finance Act, 1994, it is basically civil in nature relatable to the immovable property not chargeable to Central Excise duty. Immovable property is neither service nor goods . Input credit is not available to them. Commercial or industrial construction service or works contract service is an input service for immovable property which is neither subjected to Central Excise duty nor to Service tax. In this regard, the Commissioner referred to a C.B.E. C. Circular, dated 4-1-2008. The Commissioner also held that the Service tax paid on lease rentals is not covered under the input service as the same is not remotely connected to the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce : Cenvat credit of ₹ 2,522/- has been denied to the assessee that the said activity is not related to manufacturing activity of the assessee. We find that the said service has been availed by the assessee for organising Diwali function in the factory for the employee and in terms of decision of the Hon'ble High Court of Karnataka in the case of Toyota Kirloskar Motor Private Limited vs. CCE 2011 (24) STR 645 (Kar.) wherein the Hon'ble High Court has held that for any such type of function organised by the assessee, in the factory premises, for enjoyment of the employees, they are entitled to avail Cenvat credit. Therefore, relying on the decision of the Hon'ble High Court of Karnataka we hold that assessee is entitled to avail Cenvat credit of ₹ 2,522/- on the said service. 5. In view of the above observations, the appeals filed by the assessee are allowed. The appeal filed by the Revenue is remanded back to the adjudicating authority in terms of Para 4(e) above for quantifying disallowance of Cenvat credit on Insurance of employees family members. As, on merits the assessee is entitled to avail Cenvat credit, therefore, no penalty is imposable o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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