By TIOL News Service

MUMBAI, JULY 14, 2017: THE issue is whether the appellant is entitled to CENVAT credit in respect of service tax paid on the services related to investment in mutual funds.

None appeared on behalf of the appellant but a request was made to dispose of the matter on merit.

The AR justified the denial of credit.

After considering the submissions, the Bench observed -

"4. …I find that undisputedly, the credit availed is in respect of the services relating to mutual funds investment. This service is not related to the manufacturing activity of the appellant. The mutual funds investment was made out of the profit of the company, which is not related to the overall business activity of the appellant. As per the definition of input service it should be used in or in relation that manufacture of final products. Even the services, such as financing, auditing and accounting, credit is admissible only if it relates to the manufacturing and business activity of the assessee. Since the mutual funds investment is from the fund which is arising after completion of the manufacturing in business activity. Therefore, this service has no relation with the manufacturing and business activity of the appellant…."

Holding that there is no error in the order of the Commissioner(Appeals), the appeal was dismissed.

(See 2017-TIOL-2418-CESTAT-MUM)