The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that LED lights, fixtures and control panels are not inputs for purpose of taxable output service.
The appellants in these cases have entered into agreements with various Municipalities/Municipal Corporations for implementation of energy conservation measures, installation of feeder panels for automation along with metering operation, maintenance and repair service of the Street Lighting fixtures etc.
The appellants herein have classified the said provision of service under the taxable category of “Scientific and Technical Consultancy Services” and “Maintenance and Repair Service”, defined under the Finance Act, 1994. The appellants availed Cenvat Credit of Central Excise duty paid on the inputs.
During the course of verification of the records maintained by the appellants, the audit wing of the service tax department observed that the appellants have manufactured the LED Lights and fittings thereof in their factory and duly discharged the Central Excise duty liability on the clearance of the said goods from outside the factory.
The issue involved in these appeals for consideration by the Tribunal is whether, the disputed goods should be considered as inputs for the purpose of availment of Cenvat Credit in respect of the Central Excise duty paid by the appellants.
The Advocate appearing for the appellants pleaded that in respect of the same premises, the appellants were registered with the jurisdictional Central Excise and Service Tax authorities for manufacture of excisable goods and for provision of taxable services.
As a manufacturer, the appellant had duly discharged the Central Excise duty liability and that since those manufactured goods were used in the other unit of the appellant for providing the taxable services, availment of cenvat credit, considering those goods as inputs cannot be faulted with. Thus, it was contended by learned Advocate that denial of Cenvat benefit on the LED lights, fixtures and control panel by the department cannot be sustained.
A Two-Member Bench comprising S.K. Mohanty, Member (Judicial) and M.M. Parthiban, Member (Technical) observed that “We do not find any merits in the impugned order, insofar as the adjudged demands were confirmed on the appellants, holding that the disputed goods shall not be considered as inputs for the purpose of the provision of the taxable output service. Accordingly, by setting aside the impugned orders, the appeals are allowed in favour of the appellants, with consequential benefits, if any, as per law.”
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