2016 (2) TMI 991 - AT - Service Tax

CENVAT credit - Telephone services - input services - Installation liasioning 8, 25, 071/- House cleaning services - Held that - This service have been held to be having not nexus with the provision of output services. Further observing that the category of service is not mentioned in the invoices in question in the impugned order. I find that Housekeeping and gardening services wherein employer spends money to maintain their factory premises in an eco friendly manner and have paid services tax on such services the same forms part of the cost of final products and accordingly same would fall within the ambit of input services. Hotel services - Held that - I hold that the Hotel services have been availed for the business travel etc. of the appellant company and the same is necessary for providing the output services. Accordingly the Cenvat Credit of 1, 28, 897/- is held allowable. Balloon delivery services - Held that - I find that the said expenses relates to delivery of 43 packets of Balloons being hiring charges for delivery to Meerut-I Courier charges agency charges paid to Communique Marketing Solutions Pvt. Ltd. who have a valid service tax registration and have been interested by the appellant as a regular marketing/sales promotion vender. Finding that the same relates to marketing and sales promotion by making the name of the company widely known among the probable customers. I find the same as an eligible input service and accordingly the Cenvat Credit of 426 is held allowable for the same. Appeal allowed - credit allowed - decided in favor of assessee.

Summary

Issues:
1. Disallowance of Cenvat Credit on installation, liaising, and documentation services.
2. Denial of Cenvat Credit on DG set maintenance and diesel filling services.
3. Rejection of Cenvat Credit on house cleaning services.
4. Disallowance of Cenvat Credit on hotel services.
5. Dispute over Cenvat Credit for balloon delivery services.

Analysis:
1. The appellant, a registered dealer under the Central Excise Act providing telephone services, appealed against the disallowance of Cenvat Credit on services like installation, liaising, and documentation for electricity connection at cell sites. The Commissioner (Appeals) disallowed the credit, stating these services were not taxable. However, the Tribunal's precedent decisions supported the appellant's claim, allowing the Cenvat Credit of Rs. 6,35,655 for these services.

2. The denial of Cenvat Credit on DG set maintenance and diesel filling services was based on the temporary nature of the arrangement and lack of service element in the invoices. The appellant argued that maintaining operational towers during power failures was essential for providing telecom services. The Tribunal agreed, allowing the Cenvat Credit of Rs. 8,25,071 for these services.

3. The issue of house cleaning services was raised, with the Commissioner holding that it lacked nexus with output services. However, the Tribunal considered housekeeping and gardening services as part of the cost of final products, allowing the Cenvat Credit of Rs. 16,595 for these services.

4. Cenvat Credit on hotel services availed by the appellant for business purposes was disallowed, citing it as Mandap Keeper Service. The appellant argued the necessity of these services for business travel, supported by relevant case laws. The Tribunal allowed the Cenvat Credit of Rs. 1,28,897 for hotel services.

5. The dispute over Cenvat Credit for balloon delivery services involved expenses related to marketing and sales promotion. The Tribunal found these services eligible as input services, allowing the Cenvat Credit of Rs. 426. The appeal was allowed, and the appellant entitled to consequential benefits as per the law.