2014 (1) TMI 1201 - AT - Service Tax

Waiver of pre deposit - Insurance Auxiliary Service - Availment of CENVAT Credit - Held that - Service is for providing group insurance policy, which is a part and parcel of the salary and perks given to the employees and, therefore, it would qualify as an eligible input service for CENVAT credit. As regards the Real Estate Agent Service, even though the appellant claims that it is towards part of the employees perks, there can be a dispute whether it is a service activity or a welfare activity. In the case of Event Management Service, the claim of the appellant is that the events are conducted to attract customers and to promote business of the bank, but from the nature of the events conducted, prima facie, we are not convinced that the events have been conducted to attract business for the bank. Buying movie tickets and supplying the same, by no stretch of imagination, can be considered to be promotion of business activities - Stay granted.

Summary

Issues:
Appeal against denial of CENVAT credit for services availed - Insurance Auxiliary Service, Real Estate Agent's Service, and Event Management Service.

Insurance Auxiliary Service:
The appellant, a bank, availed group insurance policy for employees as an input service. The appellant argued that it qualifies as an eligible input service under Rule 2(l) of the CENVAT Credit Rules, 2004, as it is a business expenditure. The Tribunal agreed, considering it part of the salary and perks for employees, allowing the credit of approximately Rs. 3.45 crores.

Real Estate Agent's Service:
The appellant claimed the service was availed to provide accommodation to employees, forming part of their perks. The Tribunal noted a potential dispute whether it was a service or welfare activity. The credit amount for this service was Rs. 16.35 lakhs.

Event Management Service:
The appellant availed service tax credit of Rs. 1.08 crore for events conducted by an event manager to retain existing customers and attract new ones. The Tribunal found that the events, including buying movie tickets, did not convincingly promote the bank's business activities. The credit availed for this service was Rs. 1.08 crore.

Overall Decision:
The Tribunal granted a waiver from pre-deposit of the balance of dues adjudged against the appellant and stayed the recovery during the appeal process. The appellant had already reversed Rs. 1.62 crore, which was deemed sufficient for the appeal hearing, considering the total credit availed for Real Estate Agent's Service and Event Management Service was approximately Rs. 1.25 crore.