2015 (12) TMI 1487 - AT - Central Excise

Admissibility of Cenvat Credit - Outdoor catering services and membership and subscriptions of various business association and business periodicals - Held that - credit in respect of out door catering services was denied on the ground that the service charges to the extent Cenvat credit was proposed to be denied were recovered by the company from the employee. In this regard appellant made submission in the appeal that they have submitted revised quantification sheet according to which the amount of Cenvat credit attributed to the amount of service charges of out door catering service recovered from the employee comes to ₹ 60,871/- instead of ₹ 1,21,742/- as confirmed by lower authority. Therefore I find the amount demanded of ₹ 1,21,742/- does not appear to be correct and only credit of ₹ 60,871/- should be denied. However since lower authority have not looked into this re-quantification, I direct the adjudicating authority to verify this re-quantifications and if it is found correct then demand amount of ₹ 1,21,742/- shall be reduced to ₹ 60,871/-. As regard the issue of Cenvat credit of membership and periodical of various business associations and law journals such as CII, Young President Pune Chapter, IEEMA, Economic Research India Ltd, MCCIA etc. I am of the view that all these member ship and subscriptions are directly related to the business activity of the appellant. Therefore I am of the view that Cenvat credit clearly admissible on these membership and subscription particularly when the amount is paid by the appellant, booked into their books of account as expenditure. - membership and business associations and subscriptions of business periodicals are admissible input services - Decided in favour of assessee.

Summary

Issues:
Admissibility of Cenvat Credit for out door catering services and membership/subscriptions of business associations and periodicals.

Analysis:
The case involved an appeal against an Order-in-Appeal where the Commissioner (Appeals) upheld the denial of Cenvat credit on certain services availed by the appellant. The appellant, engaged in manufacturing excisable goods, was found availing Cenvat credit on services like membership of business associates and out door catering. The show cause notice proposed denying Cenvat credit on these services, leading to a demand of Rs. 3,11,718, along with interest and penalties. The Commissioner (Appeals) affirmed the original order, prompting the appellant to appeal further.

During the hearing, no representation was made on behalf of the appellant, and the Assistant Commissioner representing the Revenue reiterated the findings of the impugned order. The issue at hand was the admissibility of Cenvat Credit for out door catering services and membership/subscriptions of business associations and periodicals. The appellant contended that the amount demanded for out door catering services was incorrect and submitted a revised quantification sheet, suggesting a reduced denial of credit. The Tribunal directed the adjudicating authority to verify this re-quantification. Regarding membership and subscriptions, the Tribunal noted that these expenses were directly related to the business activity of the appellant, and thus, Cenvat credit was deemed admissible.

The Tribunal referred to previous judgments on similar issues, such as BAL PHARMA LTD. and BACH ELECTRIC LTD., where Cenvat credit was allowed on membership fees, professional charges, and other services. Membership of business associations like CII, Young President Pune Chapter, IEEMA, Economic Research India Ltd., MCCIA, and subscriptions to business periodicals were considered admissible input services. The Tribunal concluded that the membership and subscriptions of business associations and periodicals were admissible input services, and credit was allowed. The appeal was disposed of accordingly.