Case Law Details
National Engineering Industries Ltd Vs Commissioner (CESTAT Delhi)
Introduction: The Central Excise and Service Tax Appellate Tribunal (CESTAT) in Delhi has recently addressed an appeal filed by National Engineering Industries Ltd., against the dismissal of their appeal by the Commissioner (Appeals). The contention revolves around the alleged incorrect availing of Cenvat credit on input services deemed ineligible such as construction service, laptop insurance, etc.
Analysis: National Engineering Industries Ltd., a manufacturer of various goods and provider of different services, contested that they wrongly availed Cenvat credit on certain input services as these services did not fall under the definition of ‘input service’ under the exclusion clauses (A) and (C) of Rule 2(l) of Cenvat Credit Rules, 2004. The authorities demanded recovery of the Cenvat credit amount along with interest and penalty.
In response, the company justified the expenses incurred for the repair and renovation of the factory premises and laptop insurance, arguing these to be indirectly related to the whole process, and hence, eligible for Cenvat credit. However, their claim was rejected by the Adjudicating Authority and was subsequently upheld by the Commissioner (Appeals).
The case brought before CESTAT now focuses on the interpretation and applicability of the ‘input service’ under the Cenvat Credit Rules, 2004. The tribunal notes that there may be a misunderstanding regarding the inclusive and exclusive parts of the rule. Moreover, the appellant’s failure to provide requisite documents before the Adjudicating Authority or the Appellate Authority complicates matters further.
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