2016 (6) TMI 1162 - AT - Service Tax

CENVAT credit - event management service - scientific and technical consultancy service - denial on that the services are not related to manufacture of the final product - Held that - the services namely event management and scientific and technical consultancy services fall in the definition of input service as held in the case of CCE Vs Stanzen Toyotetsu India (P) Ltd 2011 (4) TMI 201 - KARNATAKA HIGH COURT - appeal allowed - credit allowed - decided in favor of assessee.

Summary

Issues:
Denial of CENVAT credit for event management and scientific consultancy services related to the manufacture of final products.

Analysis:
The appeal was filed against the denial of CENVAT credit for service tax paid on event management and scientific consultancy services by the Commissioner (Appeals). The appellant, engaged in manufacturing cigarettes and tobacco products, availed various services for its factory. The Assistant Commissioner confirmed the demand for denying CENVAT credit on specific services, including maintenance of canteen boiler, event management, and scientific and technical consultancy services. The Commissioner (Appeals) partially allowed the appeal but rejected the appellant's contention regarding event management and scientific consultancy services, confirming a demand of &8377; 27,569 along with interest. The appellant challenged this rejection in the present appeal.

During the hearing, the appellant's counsel argued that the impugned order contradicted previous Tribunal and High Court judgments and misinterpreted the definition of input service in the CENVAT Credit Rules. The definition of input service includes services used directly or indirectly in the manufacture of final products. The appellant contended that safety audits conducted at the factory were essential for compliance with safety standards under the Factories Act and Karnataka Factories Rules, making them integral to the manufacturing process. Invoices from service providers indicated the services were related to safety events, audits, and technical assessments. The appellant cited relevant case laws supporting the broad interpretation of input services.

In contrast, the A.R. reiterated the Commissioner's findings. After considering the arguments, case laws, and records, the Judicial Member concluded that event management and scientific and technical consultancy services qualified as input services under the broad definition provided in the cited judgments. Therefore, the impugned order was set aside, and the appeal was allowed in favor of the appellant. Consequential relief, if any, was granted.

This detailed analysis highlights the issues of denial of CENVAT credit for specific services related to the manufacture of final products, the arguments presented by both parties, the interpretation of the definition of input services, and the final decision of the Appellate Tribunal in favor of the appellant.