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2015 (1) TMI 1144 - AT - Service TaxDisallowance of CENVAT Credit - Various services - Held that - Respondents are eligible for credit on Rent-a-Cab service. Regarding credit availed on Out-door catering, Insurance service, Pandal and Shamiyana services, testing and analysis, I find from the records that the respondents availed credit on these services for carrying out business activities and business meetings which are related to promotion of their business. In view of the Honble High Court of Bombay judgment in the case of CCE Vs. Ultratech (2010 (10) TMI 13 - BOMBAY HIGH COURT), the issue has already been settled in favour of the respondents and they are eligible for the credit on the above services. As regards the input credit availed on Sodexo Coupons issued to their employees which can be used by them for various purpose of transactions and it has no nexus in relation to any business activities of the respondents. Therefore, the respondents are not eligible for the credit of ₹ 31,472/- availed on sodexo coupons under Business Auxillary Service. Respondents are eligible for availing input credit on Rent-a-Cab Service, Outdoor Catering, Business Auxiliary Service, Insurance service, Pandal & Shamiana, Testing and Analysis, and Health & Fitness Service etc. other than Sodexo coupons. Accordingly, the impugned order is modified to the extent of credit allowed on sodexo coupons - Decided partly in favour of Revenue.
Issues:
1. Disallowance of input service credit on various services by the adjudicating authority. 2. Appeal filed against the Order-in-Appeal dated 08.12.2009. 3. Nexus between input services and output services provided by the respondents. 4. Eligibility of input credit on Rent-a-Cab Service, Outdoor Catering, Business Auxiliary Service, Insurance service, Pandal & Shamiana, Testing and Analysis, and Health & Fitness Service. 5. Validity of availed credit on Sodexo Coupons under Business Auxiliary Service. Analysis: The case involved the disallowance of input service credit on various services by the adjudicating authority, leading to an appeal against the Order-in-Appeal dated 08.12.2009. The respondents had availed credit on services like Rent-a-Cab Service, Outdoor Catering, Business Auxiliary Service, Insurance service, Pandal & Shamiana, Testing and Analysis, and Health & Fitness Service. The adjudicating authority disallowed a credit of Rs. 26,08,657, which was confirmed along with interest. However, the lower appellate authority set aside the order and allowed the appeal, prompting the revenue to file an appeal against the impugned order. The main contention raised by the revenue was the lack of nexus between the input services availed by the respondents and the output services provided by them. The period in question was 2006-07 and 2007-08, with the definition of input service undergoing an amendment on 01.04.2011, imposing restrictions. The Board had clarified through Circular No. 943/4/2011-CX dated 29.04.2011 that credit on Rent-a-Cab service was available for the period before 01.04.2011. Based on this clarification, the respondents were found eligible for credit on Rent-a-Cab service. Regarding other services like Outdoor Catering, Insurance service, Pandal & Shamiana, Testing and Analysis, the respondents had availed credit for conducting business activities and meetings related to the promotion of their business. Citing the judgment of the Hon'ble High Court of Bombay in the case of CCE Vs. Ultratech, it was established that the respondents were entitled to credit on these services. However, the input credit availed on Sodexo Coupons, which were issued to employees for various transactions, was deemed to have no nexus with the business activities of the respondents. Therefore, the respondents were not eligible for the credit of Rs. 31,472 availed on Sodexo coupons under Business Auxiliary Service. In conclusion, the respondents were deemed eligible for availing input credit on various services except for Sodexo coupons, leading to a partial allowance of the revenue's appeal.
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