Input Service beyond The Manufacturing Site

The expression available in thestatute book must be read in a manner that the intended object be achieved. The manufacturers used inputs and input services during the process ofmanufacturing and is entitled totake credit already paid on these inputs or the input services as the case may be.

In certain circumstances manufacturer use the input services beyond the manufacturing site such assecurity services at job worker premises, testing services of the products, renting ofimmovable property etc. but in these cases sometimes cenvat is denied solely on the groundthat these services are consumed beyond the manufacturing site. The Cenvat Credit Rules 2004 is carefully designed to give benefit of credit to the manufacturers and the definition ofinput service(2l of the CCR 2004) is a bit wider that the definition of input (2k of the CCR 2004). While in the case of input it is clearly mentioned that the same has to be received in the factory but in the case of input services the only stipulation as mention in the definition isthat it should be received by the manufacture of the final products and not necessarily in themanufacturing place itself. Let us examine this issue a bit further.

The definition of input service clearly mention that even a service is used indirectly it is covered by the definition and credit of the duty paid is to be allowed. The service tax paid on the rent, security, maintenance, testing, outdoor catering etc. definitely fall within the definition of input service even if the service is consumed beyond the manufacturing site. The only ground for exclusion is if these services are complete alien to the manufacturing of the final product. The issue is already settled judicially in the following decisions which areexpected to be fallowed :

1. Commisisoner Vs. Ultratech Cement Ltd. 2010 (20) STR 577 (Bom.)
2. Deepak Fertilizers & Petrochemicals Corporation Ltd. Vs. Commissioner 2013 (32) STR 532 (Bom.)
3. Commissioner vs. Siemens Healthcare Diagnostics Ltd 2014 (36) STR 192 (Tri. Ahmd.)