2010 (12) TMI 103 - AT - Service Tax

Input service - membership of a club - Cenvat Credit - directors have taken the membership of the club to hold the business meetings - Held that - appellants have failed to produce any evidence in support of their contention that the appellants had hold their business meeting in the club for which the directors of the appellants took membership of the club - Benefit of cenvat credit denied.

Summary

Issues:
Denial of input service credit for club membership service.

Analysis:
The appeal was filed against the denial of input service credit for club membership service amounting to Rs.21,012. The issue was considered narrow in scope, and after waiving the pre-deposit condition, both parties agreed to proceed with the appeal for disposal. The appellants' representative stated that the club membership was taken by the directors for business meetings. However, upon review, it was found that the appellants failed to provide any evidence supporting their claim that business meetings were held at the club by the directors who took the membership. It was established that the appellants' firm was not a member of the club, and there was no demonstrated connection between the services availed by the directors and the business activities of the firm, rendering input service credit unavailable as per rule 2(l) of the CER 2004.

The impugned order was upheld, and the appeal was rejected based on the lack of evidence supporting the claim for input service credit. Additionally, regarding the penalty issue, it was noted that the case involved the interpretation of the statute, and no penalty was warranted in this instance. Consequently, the appeal was disposed of, and the stay application was also resolved accordingly.