Order Date – 14 December 2023

Parties: Deepkiran Foods Pvt Ltd Vs C.C.E. & S.T.-Ahmedabad-iii

Facts –

• The Appellant, Deepkiran Foods Pvt Ltd, claimed cenvat credit n respect of (a) clearing services, (b) consultant engineering services, (c) courier service, (d) premium paid on insurance of bus / van / two wheelers, (e) motor vehicle services rendered for servicing van, (f) advertising services taken for purchase of land, (g) business Auxiliary services.
• However the same was denied on the ground that the activity related to business has been removed from the inclusion portion of the definition of input service with effect from 01.04.2011, therefore, the credit on the service in question is not admissible with effect from 01.04.2011.

Issue –

• Whether the appellants are entitled for CENVAT Credit in respect of the services

Order –

• The Tribunal observed that even though the specific entry that is activity related to business has been removed the services, which are otherwise required for the overall business activity of the manufacture of goods are admissible input service. In many judgments even post 01.04.2011, the services have been held as admissible input services and credit has been allowed.
• Further, in the case of RMZ Infotech Pvt. Ltd. V/s. Commr of Central Tax, Bangaluru East 2022 (64) GSTL 599 (Tri – Bang), it is settled that even for the period post 01/04/2011, when the entry i.e. `Activity related to business’ was removed from the definition of Input Service, credit is admissible in regard to all the services which are not specifically excluded as the same is Input Service. Hence, the removal of entry ‘Activity related to business’ has not adversely affected the admissibility of various input services in question in the present case.
• Hence, the credit claimed by the assessee in their appeal is admissible, accordingly demand on those services is set aside. As regards to revenue’s appeal, the amount involved is admittedly less than Rs. 50,00,000/-, therefore, the revenue’s appeal is not maintainable on the ground of Government’s Litigation Policy as per the Circular No. 390/MISC./116/2017-JC dated 22.08.2019.
• The appeal is allowed.