The expression available in the statute book must be read in a manner that the intended object be achieved. The manufacturers used inputs and input services during the process of manufacturing and is entitled to take credit already paid on these inputs or the input services as the case may be.
In certain circumstances manufacturer use the input services beyond the manufacturing site such as security services at job worker premises, testing services of the products, renting of immovable property etc. but in these cases sometimes cenvat is denied solely on the ground that these services are consumed beyond the manufacturing site. The Cenvat Credit Rules 2004 is carefully designed to give benefit of credit to the manufacturers and the definition of input service(2l of the CCR 2004) is a bit wider that the definition of input (2k of the CCR 2004). While in the case of input it is clearly mentioned that the same has to be received in the factory but in the case of input services the only stipulation as mention in the definition is that it should be received by the manufacture of the final products and not necessarily in the manufacturing place itself. Let us examine this issue a bit further.
The definition of input service clearly mention that even a service is used indirectly it is covered by the definition and credit of the duty paid is to be allowed. The service tax paid on the rent, security, maintenance, testing, outdoor catering etc. definitely fall within the definition of input service even if the service is consumed beyond the manufacturing site. The only ground for exclusion is if these services are complete alien to the manufacturing of the final product. The issue is already settled judicially in the following decisions which are expected to be fallowed :
- Commisisoner Vs. Ultratech Cement Ltd. 2010 (20) STR 577 (Bom.)
- Deepak Fertilizers & Petrochemicals Corporation Ltd. Vs. Commissioner 2013 (32) STR 532 (Bom.)
- Commissioner vs. Siemens Healthcare Diagnostics Ltd 2014 (36) STR 192 (Tri. Ahmd.)
Author Details- Prabhat Kumar, Advocate, Rajesh Kumar & Associates, Mob: 9312315121, Email: custom.excise@gmail.com, Web: www.rajeshkumar.co.in)
The dis allowances raised by department many a times are frivolous in first place, still they dont mind putting such dis allowances, dont know what propaganda does department follows?