2015 (11) TMI 607 - AT - Central Excise

Denial of CENVAT Credit - eligible input services - SSI Exemption - Held that - For availing credit on printing of calendar greeting cards diaries etc. the appellant used these services for advertisement purposes of their products therefore these are integral part of their sale promotion. I accordingly hold that the appellant is entitled to take credit on printing of calendar greeting cards diaries etc. Further I hold that for organizing award functions these activities are parts of their sale promotion as the students to whom the awards have been given they give innovative idea for marketing their products in the public. Therefore the said activities are also the activities for sale promotion. Accordingly the appellant is entitled to take credit on printing of calendar greeting cards diaries etc. and organizing award functions which are integral part of the sale promotion. For demand of service tax under the category of renting of immovable property for the period 2007-08 to 2010-11 the total demand of 44, 030/- which is the below the threshold limit and the Revenue has not produced any contrary evidence that the appellant has crossed the threshold limit. In the absence of evidence I hold that the appellant s turnover is below the threshold limit of SSI exemption. Therefore the appellant is not liable to pay service tax on these services. In these circumstances I do not find any merit in the impugned orders of the Commissioner (Appeals) and the same are set aside. - Decided in favour of assessee.

Summary

Issues:
1. Entitlement to credit on services like printing of calendar, greeting cards, diaries, organizing award functions.
2. Liability to pay service tax for renting immovable property below the threshold limit.

Analysis:

Issue 1: Entitlement to credit on services
The appellant contested the denial of credit for service tax paid on services such as printing of calendars, greeting cards, diaries, and organizing award functions. The appellant argued that these services were integral to their sale promotion activities. The consultant emphasized that these services were utilized for promoting their products and generating innovative marketing ideas. The appellant claimed entitlement to credit on these services. On the contrary, the AR representing the respondent opposed this contention. The AR argued that these activities were more in the nature of welfare or facilities for employees rather than integral to business operations. The AR cited precedents to support the argument that these services did not qualify for tax credit. After hearing both parties, the tribunal held that the appellant was indeed entitled to take credit on the mentioned services as they were integral to the sale promotion activities, aiding in product promotion and marketing strategies.

Issue 2: Liability for service tax on renting immovable property
Regarding the liability to pay service tax for renting immovable property for commercial purposes below the threshold limit, the appellant contended that they fell within the Small Scale Industries (SSI) exemption limit during the relevant period. The total demand for service tax was below the threshold limit, and the Revenue failed to provide evidence to the contrary. The tribunal found that the appellant's turnover remained below the threshold limit for SSI exemption, absolving them from the liability to pay service tax on these services. Consequently, the tribunal set aside the impugned orders of the Commissioner (Appeals) and allowed the appeals with any consequential relief. The judgment highlighted the importance of evidence in determining liability for service tax, especially concerning threshold limits and exemptions.

In conclusion, the tribunal ruled in favor of the appellant on both issues, affirming their entitlement to credit on specific services related to sale promotion activities and exempting them from the liability to pay service tax on renting immovable property due to remaining below the threshold limit for SSI exemption.