2014 (1) TMI 664 - AT - Service Tax

CENVAT Credit - Interpretation of Input service - Custom clearing agent services, erection and installation services, counter services and credit card services - Held that - all the services stand considered by various decisions and stand held as eligible input services. However, as regards, catering services, we find that the Hon ble Bombay High Court in the case of Ultratech 2010 (10) TMI 13 - BOMBAY HIGH COURT , has observed that catering services would be eligible for Cenvat input services only if the assessee is not charging the employees. The learned Advocate has not been able to show any evidence to the above effect and submits that the demand on the above catering services falling within the limitation period is not being contested by him. We accordingly allow the Cenvat credit in all the services except a part of the demand falling within limitation period on catering services - Stay granted.

Summary

Issues:
Denial of Cenvat credit on various services including Clearing House Agent, Erection & Commissioning, Inward Freight, Courier Services, Credit Card Services, Real estate agent, Repair and Maintenance.

Analysis:
1. The Tribunal found that Cenvat credit on services like custom clearing agent, erection and installation services, counter services, and credit card services should not be denied as they are utilized in the regular course of business. It was emphasized that a broader interpretation of input services is necessary. The Tribunal referred to previous decisions to support the admissibility of these services as input services essential for allowing credit on the services paid for.

2. Regarding real estate agency services, it was argued that these services were obtained for financing and marketing the appellant company's office, thus qualifying as eligible input services related to the business. Citing the decision of the Hon'ble Bombay High Court in the case of Ultratech, it was concluded that any services connected to the business of the appellant are covered under the definition of input services, allowing the appellant to claim credit on these services.

3. The Tribunal also considered the case of inward freight services, mentioning previous rulings by the Tribunal and the Karnataka High Court's decision in the case of CCE v. Stanzen Toyotetsu India Pvt. Ltd. It was implied that these services should be deemed eligible input services for claiming credit.

4. In the case of catering services, the Tribunal referred to judgments in cases involving Samsung Electronics (I) Pvt. Ltd. and GTC Industries Ltd. It was highlighted that catering services would be eligible for Cenvat input services only if the employees are not charged. The Tribunal noted the absence of evidence to support this condition and allowed Cenvat credit on all services except for the portion of demand falling within the limitation period related to catering services.

5. Given that the issues revolved around the interpretation of the law, the Tribunal decided to set aside the entire penalty imposed on the appellant, even though a portion of the demand was not contested by the appellants. Both appeals were disposed of accordingly.