2018 (9) TMI 1120 – CESTAT CHENNAI – TMI – CENVAT Credit – Courier service – audit fee – manpower used for TDS entry – insurance service – housekeeping service – consultancy services – book adjustment – penalty.
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Courier service – whether the appellant is eligible for credit availed on courier service used for sending free samples to the buyers abroad? – Held that:- Although the said service has been shown in the show cause notice and the orders as outward transportation, the appellant has produced invoices as discussed in the adjudication order to show that these service are availed by the appellant for sending the free samples to the buyer abroad. The documents show that the services of DHL courier service were availed by the appellant for sending the samples of medicines to buyers abroad – thus, these are not outward transportation service as alleged in the show cause notice or in the adjudication order – However, the said invoices were not produced before the adjudicating aut
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insurance, which is in the nature of covering the risk of gratuity amount, I am of the view that the same would not fall within the exclusion clause. The manufacturer avails such insurance to cover the financial risk that he would have to face in case of payment of gratuity to employees and therefore is directly related to manufacture – credit on the services allowed.
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Housekeeping service – Held that:- It is seen that the appellant has not produced the entire invoices regarding this issue – matter requires reconsideration.
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Consultancy services – Held that:- Since the said services are availed for legal advice / consultancy, I am of the view that the same would be eligible for credit, if the appellant produces the invoices – matter remanded.
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Also, appellant submitted that under the heading book adjustment, the appellant has actually availed credit of manpower supply agency service availed for calibration service of the machines – Held that:- Since these are directly r
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ed ineligible input service tax credit on various input services. Show cause notice was issued proposing to disallow the credit which after adjudication allowed credit on certain service. The appellant filed appeal before Commissioner (Appeals) against the disallowance of credit on various services. Vide the order impugned herein, the Commissioner (Appeals) also has disallowed credit on certain input service. Hence the appellant is now before the Tribunal. 2. On behalf of the appellant, ld. counsel Shri G. Mani submitted that the services involved are outward transportation/courier service, audit fee/rent-a-cab service, TDS entry, insurance service, housekeeping service, consultancy service, book adjustment / manpower and other services. He explained that the credit in respect of the input service shown as outward transportation service is actually received for courier service. The appellant had sent samples of medicines to the buyers abroad and had availed the courier service for this
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low have rejected the credit of service tax paid on such service stating that these are not having nexus with the manufacturing activity. He prayed that the same may be allowed. 2.3 Under the heading, insurance service, appellant has availed credit on goods transit insurance as well as employees insurance which is in the nature of covering the gratuity amount payable to the employees. He submitted that the exclusion clause in the definition of input services excludes only such insurance services which are availed for the employees during the journey on leave travel. That these insurance services are to cover the risk of the manufacture with regard to the goods under transit, as well as the financial liability of the appellant for payment of gratuity to the employees. That this would fall within activities relating to finances of appellant and are within the inclusive part of the definition of input service and therefore eligible for credit. 2.4 The authorities below have observed that
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further chance to produce all the documents. 2.6 Under the heading book adjustment, the authorities have rejected the service tax paid on calibration services. He submitted that manpower was recruited for doing the calibration work of the machines and these services are integrally connected with the manufacturing activity. This was erroneously stated to be book adjustment and therefore has been rejected by the authorities below. He submitted that the appellant would be able to furnish documents to show that such services were availed for calibration of the machines and requested for remand of the matter. 2.7 Under general category of other services, the authorities below have rejected the service tax credit on manpower supply agency service used for data entry. He submitted that the appellant would be able to produce such documents and requested for remand of the matter. 2.8 In respect of manpower for shivtej, he submitted that the appellant has already reversed and is not contesting t
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icient documents to show that the vehicle used for providing conveyance is capital goods for the service provider. Thus, as per clause (B) of the definition of input service , the said services are not eligible for credit. 3.2 In respect of TDS entry, he submitted that the said service has no nexus with the manufacturing activity. 3.3 In respect of insurance service, he submitted that this falls within the exclusion clause under clause (C) of the definition of input service and therefore has been rightly disallowed by the authorities below. 3.4 Housekeeping services were availed by the appellant as manpower supply service and therefore not eligible for credit. The appellant has not produced any document with regard to legal consultancy and book adjustment (calibration service). Therefore, credit on these services has been rightly disallowed. 3.5 With regard to other services like manpower use for data entry, the appellant having not produced any document is not eligible for credit. 4.
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djudicating authority. Therefore, I deem it fit to remand the said issue to the adjudicating authority who shall verify the invoices and consider the discussions made with regard to this issue. 5.2 With regard to audit fee, it is seen that the authorities below have allowed credit in respect of service tax paid on charges paid to the auditor. The appellant is contesting the service tax paid on the conveyance charges for the auditor. However, he has not furnished any document to show that the vehicle used for conveyance of the auditor was registered in the name of the service provider. For this reason, I hold that the authorities below have rightly rejected the same. 5.3 The manpower used for TDS entry is to the tune of ₹ 1,823/-. Since the appellant has to do the work of deducting the tax at source, manpower have been used for such work (data entry), I am of the view that the disallowance of credit is unjustified and requires to be set aside, which I hereby do. 5.4 The appellant
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he appellant has not produced the entire invoices regarding this issue. I therefore remand the matter to the adjudicating authority who shall consider the eligibility of credit on housekeeping service, who shall grant the appellant an opportunity of personal hearing and to furnish details / documents with regard to this issue. I hold that the said services which are required for getting the premises clean and hygienic would be eligible for credit. 5.6 The credit in respect of consultancy services have been rejected for the reason that the appellant has not produced invoices. Since the said services are availed for legal advice / consultancy, I am of the view that the same would be eligible for credit, if the appellant produces the invoices. The said issue is also remanded to the adjudicating authority. 5.7 The ld. counsel has submitted that under the heading book adjustment, the appellant has actually availed credit of manpower supply agency service availed for calibration service of t
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