Larsen & Toubro Ltd. Vs CCE (CESTAT Mumbai)
This is an appeal has been filed by the appellants against denial of credit of service tax in respect of services provided to their job workers while doing their job work.
2. Ld. Counsel for the appellants argued that they were operating in Rule 4(5) of Cenvat Credit Rules. At the premises of the job worker, they had supplied the service of Fork lift, Crane, Hydra and DG set and they had paid for the said services and availed the credit of the service tax paid thereon. He relied on the decision of the Tribunal in MRF Ltd. 2013 (31) STR 689 wherein under identical circumstance credit has been allowed.
3. Ld. AR relied on the grounds of review.
4. I have gone through rival submissions. From the perusal of grounds of review, review has been ordered relying on the Rule 9(5) of Cenvat Credit Rules and the definition of input service appeared in Rule 2(1) of Cenvat Credit Rules, 2004. Reliance has been placed on the decision of the Hon’ble Apex Court in Maruti Suzuki 2009 (240) ELT 641 (SC). It is seen that none of these rules prescribed that the input services on which credit is to be availed have to be used within the premises of the person manufacturing the goods. The decision of Hon’ble Apex Court in Maruti Suzuki only states that it is necessary to establish that the input services are used in or in relation to the manufacture of the final product. It is not in doubt that the said services are used in the premises of the job worker who is doing job work on the goods being manufactured by the appellant. Thus it is apparent that the said services have been used for the manufacture of the final product cleared by the appellant though indirectly. It is further seen that the decision of Tribunal in MRF Ltd. squarely covers the situation. In the said decision, following has been observed:-
10. I have considered the arguments from both sides. The definition of input services nowhere specifies that the services have to be received and utilized within the factory. This position has been clearly held by the Tribunal in the case of Maharashtra Seamless Ltd. (supra). Rule 3 of the CENVAT Credit Rules specifically provides that credit of tax paid on any input service, used in the manufacture of intermediate products, by a job worker availing the benefit of exemption specified in Notification No. 214/86-C.E. be allowed. I find that the orders relied upon by the departmental representative has not examined the express provision under Rule 3 of Cenvat Credit Rules or the recent clarification dated 19- 1-2010 (supra) issued by C.B.E. & C. in the matter. Therefore, I adopt the principle laid down by the Mumbai Bench of the Tribunal in the case of Maharashtra Seamless Ltd. v. Commissioner of Central Excise, Raigad and I hold that there is no reason to deny Cenvat credit of security services utilized by the appellant at the premises of the job workers and paid for by the appellant.
5. Consequently, the appeal is dismissed.