Leel Electricals Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Delhi)
Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Delhi dismissed the appeal of Leel Electricals Ltd., formerly known as Lloyd Electric & Engineering Ltd., challenging the demand for wrongly availed CENVAT Credit. The case pertained to a demand of Rs. 80,95,227 along with penalties under Rule 15(2) of the CENVAT Credit Rules, 2004, read with Section 11AC(1)(c) of the Central Excise Act, 1944. The dispute arose from the alleged wrongful availing of credit on input services that were either unrelated to the manufacturing activities of the Bhiwadi unit or were on invoices not in the company’s name.
The tribunal examined whether services such as advertisement, tour operator services for consignment agents, and installation/dismantling of machinery at another unit could be considered “input services” under Rule 2(l) of the CENVAT Credit Rules. It was found that advertisement services were used for promoting domestic air conditioners manufactured at another unit, not the Bhiwadi unit, which primarily produced products for railways. The CESTAT upheld the Adjudicating Authority’s findings that there was no nexus between the services claimed and the manufacture, clearance, or sale of the final products of the appellant’s Bhiwadi unit, rendering the credit inadmissible.
