Hindustan Petroleum Corporation Ltd Vs Commissioner of Central Excise & Service Tax (CESTAT Hyderabad)
The case concerns an appeal against an order disallowing Cenvat credit amounting to ₹1,15,08,642 along with interest and penalty for the period October 2010 to October 2011. The dispute arose from denial of credit on various input services such as manpower, catering, insurance, construction, repair, and transportation, on the ground that these did not qualify as “input services” under Rule 2(l) of the Cenvat Credit Rules, 2004. Out of the total amount, ₹44,48,271 had already been reversed by the appellant prior to issuance of the show cause notice dated 05.10.2012, while the remaining amount was contested.
The appellant argued that the definition of “input service” prior to 01.04.2011 was broad and included all activities relating to business. It was contended that services such as manpower, insurance, cleaning, repairs, and similar services were essential for business operations and therefore eligible for credit. For the post-01.04.2011 period, it was submitted that exclusions introduced in the amended definition should be strictly interpreted and would apply only to specified services such as construction of buildings or civil structures.
The department, on the other hand, argued that services like construction, civil works, and catering were not directly related to manufacture and were specifically excluded after the amendment effective from 01.04.2011. It was also contended that the appellant failed to establish a sufficient nexus between the services and manufacturing activity.
