By TIOL News Service

AHMEDABAD, JULY 22, 2014: THE issue is whether CENVAT credit of services like document processing charges paid by the appellant is admissible or otherwise.

These services are availed by the appellant from the place of removal as well as at the Port of export at the time of clearances of goods from the factory and at the time of export. So also, the services of the service provider in‘documentation processing' are also utilised for claiming rebate from the department.

The CENVAT credit availed was denied by the CCE & ST, Vadodara and, therefore, the appellant is before the CESTAT.

It is submitted that these services are availed for ‘managing the finances' of the appellant which is essential for proper flow of funds for undertaking manufacturing activities and for conducting appellant's business.

Reliance is placed on the Stay order of the Bench dated 12.09.2013 passed in their case on the same issue and also the following decisions -

+ Deepak Fertilizers Petrochemicals Corporation Limited - 2013-TIOL-212-HC-MUM-CX

+ Coca Cola India Pvt. Limited vs. CCE, Pune - 2009-TIOL-449-HC-MUM-ST

+ Rolex Rings P. Limited - 2008-TIOL-383-CESTAT-AHM

+ Adani Pharmaceuticals (P) Limited - 2008-TIOL-1582-CESTAT-AHM

The Revenue representative placed reliance on the decision of the Gujarat High Court in the case of Cadila Healthcare Limited - 2013-TIOL-12-HC-AHM-ST and submitted that activities undertaken by manufacturer will not ipso-facto make the credit admissible as it should be analogous to the activities mentioned in relation to business under the definition of input service under Rule 2(l) under CCR, before it was amended with effect from 01.4.2011.

The Bench observed -

++ It is the case of the appellant that such services are essential for proper flow of funds required for the business activities of the appellant.

++ The words "activity relating to business" are not existing in the definition of input service with effect from 01.4.2011 but services availed in relation to "Financing" are specified in the definition of input service under Rule 2(l) of the CCR, 2004 before and after 01.4.2011.

++ Proper flow of funds for manufacturing activity/business of a unit are required as financial management where such finances are arranged from the banking channels or by speedy recovery of amounts due from clients or from any government department.

Holding that the appellant has made out a prima facie case in favour, the CESTAT waived the requirement of pre-deposit of adjudged dues & stayed the recovery.

(See 2014-TIOL-1313-CESTAT-AHM)