2011 (8) TMI 372 - AT - Service Tax

Air ticket booking service - Whether the Service Tax paid for booking of air tickets is admissible as CENVAT Credit or not - cenvat credit allowed except CENVAT Credit of Service Tax paid for booking air tickets for travel by employee s wife who met with an accident

Summary

Issues:
1. Admissibility of Service Tax paid for booking air tickets as CENVAT Credit.
2. Eligibility of credit for Service Tax paid on CHA service or port service.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Ahmedabad, addressed two appeals concerning similar issues and delivered a common order. The first appeal, E/628/2011, focused on whether the Service Tax paid for booking air tickets could be claimed as CENVAT Credit. The second appeal, E/629/2011, not only dealt with the admissibility of Service Tax credit on air ticket booking but also included questions regarding the eligibility of credit for Service Tax paid on CHA service or port service. The Tribunal had previously remanded the matter to the appellate authority for fresh decision in the first round of litigation.

The Service Tax credit for air ticket booking services was initially disallowed due to the lack of evidence showing utilization before the removal of goods and a nexus to manufacturing activities. However, the appellant argued that the lower authorities had exceeded the terms of remand. Citing the case of CCE Ahmedabad Vs. Fine Care Biosystems, the appellant contended that Service Tax paid on air ticket booking should be considered an input service. Regarding CHA services and Port services, the Tribunal had previously ruled in favor of the appellant, allowing CENVAT Credit for Service Tax paid on these services.

After considering submissions from both sides and reviewing the records, the Tribunal found in favor of the appellant. The decision in the case of Fine Care Biosystems supported the admissibility of Service Tax paid on air ticket booking services. The Tribunal noted that the air ticket bookings were used for various business-related activities, aligning with the definition of input service as per relevant legal precedents. The Tribunal also acknowledged the appellant's agreement that the credit for air tickets related to an employee's wife's accident was not claimed. Ultimately, the Tribunal allowed the Stay Petitions and appeals, granting consequential relief to the appellant, except for the credit of Service Tax paid on air ticket booking for the employee's wife's travel, which was not claimed.

In conclusion, the judgment resolved the issues related to the admissibility of Service Tax credit for air ticket booking services and the eligibility of credit for CHA service and port service, providing a detailed analysis based on legal interpretations and precedents to support its decision.