2013 (12) TMI 1015 - AT - Service Tax

Demand of Service Tax - Denial of the benefit of Modvat credit - Event management services, liaisoning services and D.G. set maintenance service - Held that - event management services stands covered by various decisions of the Tribunal and Karnataka High Court referred supra. As regards the Liaison services, we are of the view that assessment made at the end of inputs services provider cannot be reopened at the end of service receiver without putting the other side on notice. Admittedly, the Service Tax stands paid by the service provider. It is the tax paid which is available as credit to the service receiver. As such, we are of the view that appellant has a good case in respect of such services. Similarly in respect of DG-set maintenance, it is a fact that said services are required for maintenance of equipment, plant, machinery etc. is required to render the business properly and without interruption. Such repair and maintenance activity have been held to be connected with output service in various decisions of Tribunal like in the case of CCE, Jaipur v. J.K. Cement Works 2009 (1) TMI 146 - CESTAT NEW DELHI . -stay granted.

Summary

Issues:
- Demand of Service Tax denial of Modvat credit for event management services, liaisoning services, and D.G. set maintenance service.

Analysis:

1. Event Management Services:
The Tribunal noted that event management services are essential for providing dutiable services, citing precedents like the Karnataka High Court's decision in Toyota Kirloskar Motor Pvt. Ltd. v. CCE, Bangalore and the Tribunal's decision in Hindustan Coca Cola Beverages Pvt. Ltd. v. CCE, Meerut-II. These cases established that event management services qualify as input services for Modvat credit. Consequently, the Tribunal found in favor of the appellant regarding the eligibility of Modvat credit for event management services.

2. Liaisoning Services:
The appellant argued that liaisoning services were crucial for obtaining necessary electrical connections, without which they could not provide output services. The adjudicating authority had denied credit for liaisoning services on the grounds that the service providers did not pay Service Tax directly. However, it was clarified that the service providers had indeed discharged their Service Tax liability under Business Auxiliary services. The Tribunal held that the assessment made at the input services provider's end could not be revisited at the service receiver's end without proper notice. As the Service Tax had been paid by the service provider, the credit should be available to the service receiver. Therefore, the Tribunal ruled in favor of the appellant regarding the eligibility of Modvat credit for liaisoning services.

3. D.G. Set Maintenance Services:
Regarding D.G. set maintenance services, the appellant argued that these services were essential for maintaining equipment and machinery to ensure uninterrupted business operations. The Tribunal acknowledged that such repair and maintenance activities were connected with output services, citing precedents like the case of CCE, Jaipur v. J.K. Cement Works. Based on this, the Tribunal concluded that the appellant had a strong case for claiming Modvat credit for D.G. set maintenance services.

4. Overall Decision:
Considering the arguments presented and the legal precedents cited, the Tribunal found that the appellant had a prima facie strong case for allowing the stay petition unconditionally. Therefore, the Tribunal ruled in favor of the appellant, allowing the Modvat credit for event management services, liaisoning services, and D.G. set maintenance services. The order was pronounced in the open court, granting relief to the appellant in this matter.