Expansive Interpretation of ‘Input Service’ under Rule 2(l)

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal examined the eligibility of CENVAT credit availed by Hero MotoCorp on multiple input services including construction services, works contract services, mediclaim insurance, outdoor catering, architect services, club membership services, photography services, repair and maintenance services, freight and clearing services relating to exports, and various other business-related services. 

The Tribunal held that the expression “input service” under Rule 2(l) of the CENVAT Credit Rules, 2004 is required to receive a broad and purposive interpretation and covers services having direct or indirect nexus with manufacturing activity or business operations. 

Consequently, the Tribunal set aside the demand of approximately ₹3.88 crore along with interest and penalty. Simultaneously, it rejected the Revenue’s challenge concerning manpower supply services used for statutory canteen operations.