CENVAT Credit - Case Laws

Renting of immovable property: In this case the properties had been rented by the appellant for display of their final product i.e., vitrified tiles. As these services were directly or indirectly used for the purpose of their business, credit cannot be denied. [Oracle Granito Ltd vs. CCE (2013) 30 STR 357 (Tri.- Ahmd.)]

Goods Transport Agency Service: The appellants availed credit on GTA services on sales on FOR basis but were denied credit by lower authorities due to amendment in the definition of input services w.e.f. 1/4/2008 i.e., replacing the expression ‘clearance from the place of removal’ to ‘clearance up to the place of removal’. The appellants contended that the place of delivery is the ‘buyer’s premises’ and not ‘the factory’. All expenses incurred (by the appellant) up to the buyer’s premises form part of the cost of the final product. There are no separate realisation towards freight and insurances. The appellants were the owners of the goods up to the place of delivery i.e., buyer’s premises and the GTA services availed by them are to be treated as input service. [Pooja Forge Lab vs. CCE (2013) 30 STR 371 (Tri.-Del.)]

Business Auxiliary Services: The definition of input services is wide enough to include the services of arranging finance for running business. Credit allowed. [Rico Castings Ltd. vs. CCE (2013) 30 STR 374 (Tri.-Del.)]

Cargo Handling Services: When the invoice clearly shows the name of the appellants and the amounts has been paid on their behalf, there is no dispute that the Cargo Handling Services has been received by them. Credit is admissible. [Royal Touch Aluminium Pvt. Ltd. vs. CCE (2013) 30 STR 375 (Tri.-Ahmd.)]

Job Worker Services: The availability of the CENVAT Credit in respect of duty paid by the jobworker has already been considered by the Tribunal in the case of Multi-Organic Pvt. Ltd. which held that the jobworker is entitled to the exemption under Notification No. 8/2005 and if he has not availed the exemption the service tax credit is admissible to the person who availed the services of the jobworker. [Royal Touch Aluminum Pvt. Ltd. vs. CCE (2013) 30 STR 375 (Tri.- Ahmd.)]

Commission Agent: The appellants were taking credit of service tax paid on services rendered by commission agent for promoting their sale. The services of commission agent used for sales promotion is specifically included under the definition of input service as defined under rule 2 (l) of CENVAT Credit Rules, 2004. [Vishal Pipes Ltd. vs. CCE (2013)30 STR 378 (Tri.-Del.)]

Cargo Handling Services: The respondents were entitled to treat CHA service as ‘input services’ under rule 2(l) of the CCR 2004 as these services were used for clearance of excisable goods from the ‘place of removal’ [CCE vs. Pokarna Ltd. ( 2013)30 STR 379 (Tri.-Bang.)]

Business Auxiliary Services: The nexus has been established between business auxiliary services received from foreign and domestic commission agents and clearance of goods from the ‘place of removal’. Business auxiliary services are input services. [CCE vs. Pokarna Ltd. (2013) 30 STR 379 (Tri.-Bang.)]

Market Research and Credit Rating Services: Credit Rating of customers is relatable to sales promotion and business manufacture. The activity is specifically included in the definition of input service. The assessee is entitled to the credit of service tax paid on such services. [Gujarat Reclaim & Rubber Products Ltd. vs. CCE (2013) 30 STR 446 (Tri.- Ahmd.)]

Where the manufacturing unit of the company at Mangalore took CENVAT credit of Banking Financial Services provided by Corporation Bank, on the strength of the invoices issued by the bank to the Mumbai office of the company, which was effectively the service recipient, it was held that this was not permissible without registering the Mumbai office as an Input Service Distributor and issuing invoices in terms of sub-rule (2) of Rule 4A of the Service Tax Rules,1994 since these provisions were specific provisions for distribution of credit. [Mangalore Refinery & Petrochemicals vs. CCE (2013)30 STR 475 (Tri.-Bang.)]