CESTAT, BANGALORE BENCH
Commissioner of Central Excise
Neuland Laboratories Ltd.
FINAL ORDER NO.10 OF 2012
APPEAL NO. E/2006 OF 2010
JANUARY 6, 2012
1. In this appeal of the department, the short question to be considered is whether the view taken by the lower authorities that the respondent was entitled to take CENVAT credit on stockbroker’s service which was used by the respondent for acquiring shares in another company with which the respondent had entered into an agreement for purchase of electricity for the purpose of manufacture of excisable product is correct or not.
2. The respondent has filed written submissions in support of the above view. They do not want to be personally heard. Therefore, I have examined the records and heard the Assistant Commissioner (AR).
3. It is not in dispute that the respondent used the services of a stockbroker for acquiring shares in another company. Again, it is not in dispute that such acquisition of shares was made pursuant to a Memorandum of Understanding between the respondent and the other company. The understanding was that the other company would supply electricity to the respondent subject to the condition that the latter would invest in the former. Undisputedly, such electricity was used by the respondent in the manufacture of their final products. These facts, correctly noted by the lower authorities, clearly bring out a nexus between the stockbroker’s service and the manufacture of the goods. The service clearly fell within the ambit of ‘input service’ as defined under Rule 2(l) of the CENVAT Credit Rules, 2004. The lower authorities have concurrently taken the correct view. This appeal of the department is therefore rejected.