The Cenvat credit is been permitted by the Punjab and Haryana High Court to Maruti Suzuki on training and coaching services, IT (software) services (CHA), cargo handling services for export, warehouse and storage services, land survey services, and hotel Broadway services.
The service is needed since it is not merely used in the manufacturing concern but also for advertisement, sales promotion, storage, place of removal, including recruitment, quality control coaching and training, and computer network, The bench of Justice G.S. Sandhawalia and Justice Harpreet Kaur Jeewan followed.
The transportation of inputs or capital goods and outward transportation up to the place of removal are hence, provided under Section 2(l).
Before the respondent taxpayer, a show cause notice was issued as to whether the credit opted in 2008-09 for the services where the Tribunal has recorded the findings has neither been utilized for the manufacturing of the goods nor the clearance of the goods.
Hence based on that it is been utilised to furnish the taxable input services and is not being counted beneath the definition of the input service under Rule 2(l), from the period July 2006 to 2010-11, Rs 12,68,80,303 was asked to be disallowed and recoverable under Rule 14 of the Rules, including with interest and penalties to be imposed under Rule 25.
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The Commissioner analyzed the invoice from ONGC and determined that it functioned as a manpower recruitment and supply agency, thus making it liable for service tax.
M/s. G4S provided drivers and issued invoices, leading to the acknowledgement of their service as eligible for claiming input service related to manpower recruitment and supply. This eligibility was granted.
Likewise, services rendered at Mundra and JNPT Port were considered eligible by referring to Rule 2(l), applicable to manufacturers of final products and clearance from the place of removal starting April 1, 2008, affirming their status as admissible input services.
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JNPT Port and Mundra Port, serving as loading points for goods handed over to shipping lines, were recognized as places of removal.
The recovery of Cenvat credit amounting to Rs. 98,34,077/- was primarily directed due to personnel stationed at the rented premises, specifically the Japanese Hostel Cum Restaurant Complex, intended for accommodating Japanese personnel.
M/s. Jukaso IT Suites managed the housekeeping and provided Japanese food catering. However, authorities initially disallowed Cenvat credit, deeming the services as personal consumption and staff welfare.
The department disagreed with the Tribunal’s decision favouring the assessee and argued that the conclusion was incorrect.
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The assessee, a major Indian car manufacturer in collaboration with its Japanese parent company, highlighted its extensive involvement in vehicle distribution, sales, supply, and exportation. They asserted that the services obtained qualified as input services for taxable services.
The court reviewed the case and agreed with the Tribunal’s modification of the Commissioner’s order. It affirmed that the majority of the Cenvat Credit had been rightfully approved by the Commissioner, and the previously declined benefit was rightly reinstated by the Tribunal.
| Case Title | Maruti Suzuki India Ltd. Versus Commissioner of Central Excise |
| CEA-18-2022 | 2023:PHHC:143925-DB |
| Date | 02.11.2023 |
| Counsel For Appellant | Mr. Sourabh Goel, Sr. Standing Counsel, Ms. Shivani Sahani, Advocate, Ms. Manika Gupta, Advocate, Ms. Geetika Sharma, advocate |
| Counsel For Respondent | Mr. Amrinder Singh, Advocate |
| PB and HR High Court | Read Order |
