2013 (12) TMI 856 - AT - Service Tax

Denial of Input service credit - Outdoor catering service for Failure to produce evidence Garden maintenance service for not qualifying under Rule 2(1) of CENVAT Credit Rules, 2004 Waiver of Pre-deposit Held that - Following CCE, Nagpur Versus Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT - any service which has nexus with the business activity of the appellant, whether it is manufacturing or rendering service, has to be treated as input service coming within the purview of Rule 2(1) of the CENVAT Credit Rules, 2004 - The applicant has been able to produce the evidence with regard to the information given to the Office of the Director of Industrial Health and Safety about the number of employees working in the applicant s Company during the relevant time Stay granted.

Summary

Issues:
1. Denial of input service credit for outdoor catering service.
2. Denial of input service credit for garden maintenance service.

Analysis:

Issue 1: Denial of input service credit for outdoor catering service
The applicant's claim for input service credit for outdoor catering service was denied due to the inability to provide evidence regarding the number of employees working in their factory during the relevant period. The applicant argued that more than 250 employees were working based on information submitted to the Office of the Director of Industrial Health and Safety. The advocate cited a decision by the Hon'ble High Court of Bombay in the case of Ultra Tech Cement Ltd., stating that any service related to the business activity qualifies as an "input service" under Rule 2(1) of the CENVAT Credit Rules, 2004. The Tribunal, considering the evidence presented and following the precedent set by the Ultra Tech Cement case, granted a waiver of pre-deposit of the dues adjudged in the impugned order, allowing the applicant to claim input service credit for outdoor catering services.

Issue 2: Denial of input service credit for garden maintenance service
Similarly, the applicant's claim for input service credit for garden maintenance service was also denied, stating that this service did not meet the criteria under the definition of Rule 2(1) of the CENVAT Credit Rules, 2004. The advocate argued that the garden maintenance service had a nexus with the business activity of the appellant, as established in the Ultra Tech Cement case. The Tribunal acknowledged the submissions made by both sides and found that the applicant had provided evidence of the number of employees working during the relevant period. Relying on the precedent set by the Ultra Tech Cement case, the Tribunal granted a waiver of pre-deposit of the entire amount of duty, interest, and penalty, allowing the applicant to claim input service credit for garden maintenance services.

In conclusion, the Tribunal, comprising Ashok Jindal and P K Jain, JJ., granted a waiver of pre-deposit for both outdoor catering and garden maintenance services, following the principles established in the Ultra Tech Cement case, thereby allowing the applicant to claim input service credit for these services during the pendency of the appeal.