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November 2016

2016 (44) STR 97 (Tri-All.) LG Electronics India Pvt. Ltd. vs. Commissioner of C.Ex. &S.T., Noida

By CA Puloma Dalal, CA Jayesh Gogri,CA Mandar Telang, Chartered Accountants
Reading Time 1 mins

Whether CENVAT credit on employees shifting expenses are admissible.
(Period of dispute – prior to 2011)

Facts

The appellant had incurred
expenses including freight charges on shifting and relocation of its employees
in accordance with transfer policy of its business and availed CENVAT credit of
service tax paid on the said services. The said credit was disallowed on the
contention that the said services have no nexus with the business, shifting of
employee was not an activity of the business.

Held

Relying on ruling, in the case of
“CCE vs. Ultratech Cement Ltd. – 2010 (20) S.T.R. 577 (Bom.), where the hon’ble
High Court Held that the definition of “input service” is not restricted to
services used in or in relation to the business of manufacturing the final
product, input service is defined illustratively and not
restrictively/exhaustively. And restriction if any is imposed post year 2011,
only if such travel expenses are of primarily of personal use and consumption.
Prior to 2011, such expenses are allowable if the same are provided to
employees in general expenditure in relation to the business of the assesse.

Appeal was allowed with
consequential relief to appellant.

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