NHK Spring India Ltd Vs Commissioner of Central Excise (CESTAT Chandigarh)
The appeal before CESTAT Chandigarh challenged an Order-in-Original denying CENVAT credit on various input services for the period 2007-08 to 2011-12, confirming a demand of Rs. 73,74,267 under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A(5) of the Central Excise Act, 1944, along with interest under Section 11AA and penalty under Rule 15 of the CENVAT Credit Rules read with Section 11AC. The appellant, a manufacturer of motor vehicle parts, had availed CENVAT credit on housekeeping/gardening, vehicle servicing, tour and travel, outward courier, interior decoration, construction, surface colouring/coating, fabrication and insurance services. Following an audit, the department alleged that these services lacked nexus with manufacturing and issued a show cause notice proposing denial of credit.
The appellant contended that the services qualified as input services under Rule 2(l) of the CENVAT Credit Rules and were used in relation to the manufacture and clearance of final products. Separate justifications were advanced for each category of service, including statutory requirements, maintenance of factory premises and machinery, employee movement, business correspondence, construction of factory sheds, and employee mediclaim policies. It was also submitted that the amendment to the definition of “input service” effective from 01.04.2011 did not affect credits availed before that date and that only housekeeping/gardening, outward courier and insurance services were availed after the amendment. The appellant further argued that the extended period of limitation was wrongly invoked because the department had discovered the issue during audit, regular returns had been filed, and no fraud or suppression had been established.
