RICO CASTINGS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) AFTER hearing both the sides I find that appellant is a manufacturer of aluminium castings for parts of motor vehicles and availed the services of Kapsons Associate Pvt. Ltd. for the purpose of getting loan from a bank and in that connection, Kapsons Associate Pvt. Ltd. raised invoices on the applicant for the service charge along with service tax paid under the business auxiliary service. The applicant, having arranged funds for their business activities have taken credit of service tax paid by M/s. Kapsons Associate Pvt. Ltd. The original authority denied the service tax credit in respect of this transaction and also few other transactions. The Commissioner (Appeals) upheld the order of the original authority denying the Cenvat credit amounting to 2,20,320/ - in respect of credit taken on the service tax paid by M/s. Kapsons Associate Pvt. Ltd. and also upheld the penalty of Rs. 2,20,320/ -. Hence; the present appeal. Learned Advocate for the applicant submits that the loan was arranged using the services of Kapsons Associates Pvt. Ltd. and the loan amount was used in their business activity and the term 'input service' is wide enough to cover the services utilized by them for the purpose of arranging loan and therefore, the credit taken is regular.

(2.) Learned SDR reiterates the finding and reasoning of the Commissioner (Appeals) and submits that the applicant has not furnished the detail as to the purpose for which the loan taken was utilized so as to determine whether the services relate to business activity of the applicant.