Case Law Details
Zoloto Industries Vs Commissioner of Central Excise (CESTAT Chandigarh)
The case of Zoloto Industries Vs Commissioner of Central Excise before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chandigarh dealt with an interpretation of the scope of ‘Input Service’ as defined under Rule 2(l) of the Cenvat Credit Rules, 2004. CESTAT held that services such as Courier Agency, Exhibition, Insurance, and Internet fall under Input Service, thus qualifying for Cenvat credit.
Zoloto Industries, engaged in manufacturing valves and cocks, was denied Cenvat credit of service tax paid on various input services amounting to Rs. 57,597/- as per the order-in-original upheld by the Commissioner (Appeals). The authorities were of the view that these services did not fall under the purview of ‘Input Service’ as per Rule 2(l) of the Cenvat Credit Rules, 2004.
Upon appeal, the CESTAT examined numerous precedents provided by Zoloto Industries, which indicated that services of the nature under contention have been previously considered as input services. CESTAT, therefore, ruled in favor of the appellant, stating that the services in question were indeed input services and qualified for the Cenvat credit.
The CESTAT’s decision is a significant development in the interpretation of ‘Input Service’ under Rule 2(l) of the Cenvat Credit Rules, 2004. It emphasizes that a broad, inclusive interpretation should be applied that recognizes the diverse range of services utilized in the course of business operations.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The present appeal is directed against the impugned order dated 15.09.2022 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has rejected the appeal filed by the appellant and upheld the order-in-original.
2. Brief facts of the case are that the appellant are engaged in manufacture of valves and cocks falling under Chapter 84 of the First Schedule to the Central Excise Tariff Act, 1985 and are registered with the Central Excise and are availing cenvat credit of duty paid on inputs and capital goods and service tax paid on input services used in or in relation to the manufacture of their final products. Vide show cause notice dated 16.01.2012, cenvat credit of service tax paid on following input services amounting to Rs. 57,597/- availed during the period January to March 2011, was sought to be denied and recovered on the ground that the said services were not covered by the scope of definition of ‘Input Service’ as defined under Rule 2(l) of the Cenvat Credit Rules, 2004.
| Sr. No. | Description of Input Service | Credit availed (Rs.) |
| 1 | Courier Agency Services | 10,821 |
| 2 | Exhibition Services | 21,946 |
| 3 | Insurance Services | 4,154 |
| 4 | Internet Services | 76 |
| 5 | Website Designing | 20,600 |
| Total | 57,597 |
3. After following the due process, the Superintendent vide order dated 19.11.2012 disallowed cenvat credit of Rs. 57,597/- and ordered for recovery of the same alongwith interest. He also imposed a penalty of Rs. 57,597/- under Rule 15 of the Cenvat Credit Rules, 2004. Aggrieved by this order, the appellant filed the appeal before the Commissioner (Appeals) who rejected their appeal. Hence, the present appeal.
4. Heard both the sides and perused the records of the case.
5. Learned Counsel for the appellant submits that the impugned order is not sustainable in law as the same has been passed without appreciating the facts and the law. He further submits that the only issue involved in the present case is whether the cenvat credit on the impugned services was admissible in terms of the Rule 2(l) of Cenvat Credit Rules, 2004 during the relevant time. He further submits that the issue of cenvat credit on input services involved in the present case has been held in favour of the appellant in following decisions :–
Courier Services
(i) Apar Industries – 2010 (20) STR 624 (Tri. Ahmd)
(ii) Apar Industries Ltd – 2011 (23) STR J1 94 (Guj)
(iii) HEG Ltd – 2010 (18) STR 446 (Tri. Delhi)
Exhibition Services
(i) Garware Polyster Ltd – 2012 (26) STR 215 (Tri. Mumbai)
Insurance Services
(i) Stazen Toyetsu India Pvt Ltd – 2009 (14) STR 316 (Tri. )
(ii) Stazen Toyetsu India Pvt Ltd – 2011 (23) STR 444 (Kar.)
(iii) Fiamm Minda Automotive Ltd – 2011 (22) STR 210 (Tri. Delhi)
(iv) Raipur Rotocast Ltd – 2010 (18) STR 466 (Tri. Delhi)
(v) Raipur Rotocast Ltd – 2010 (37) STR 978 (Chhattisgarh)
Internet Services and Website Designing
(i) Coca Cola India Pvt Ltd – 2009 (15) STR 657 (Bom.)
6. On the other hand, learned D.R. reiterates that findings in the impugned order.
7. After considering the submissions made by both the sides and perusal of the records and various decisions relied upon by the appellant cited supra, I am of the considered opinion that all the impugned services involved in the present case have been held to be input services by various decisions of the Tribunal cited supra; therefore, by following the ratio of the above said decisions, I hold that the impugned order is not sustainable in law and the same is liable to be set aside. Hence, I set aside the impugned order and allow the appeal.
(Dictated and pronounced in the open court)
