2011 (4) TMI 1236 - AT - Service Tax

Summary

Issues: Denial of credit for service tax on travelling expenses and facility management services.

Travelling Expenses:
The department denied credit for service tax on travelling expenses and facility management services, claiming they were not input services related to the applicants' activities. The advocate argued that the services of a traveling agent were used for official duties, citing a previous stay order where similar credit was allowed. The Tribunal noted that the nature of the activity for which service tax was paid should have been clearly identified. It was observed that services related to travel and office maintenance were closely linked to the manufacturing activity, and thus, the applicant was granted a waiver of pre-deposit of dues and a stay on recovery pending appeal.

Facility Management Services:
Regarding the credit for service tax on management facility services, the advocate contended that office maintenance was integral to the manufacturing activity and that denial of credit based on invoices from the office was incorrect. The Tribunal considered that maintenance of the office was connected to the manufacturing activity and that services related to office work and staff travel were linked to the business activity of the applicants. Consequently, the applicant was deemed to have established a case for a waiver of pre-deposit of dues as per the impugned order, leading to a stay of recovery pending appeal.