2018 (2) TMI 1772 - AT - Central Excise

CENVAT Credit - input services - group insurance service - outdoor catering service - club membership service - travel agent service - scope of Exclusion Clause in the definition of Input Service - Held that - The exclusion clause is for personal use of the employee. But nowhere it is coming out from the facts of the case that these services has been availed by the appellants for their employee s personal use. Moreover the appellant is under statutory obligation to provide group insurance scheme and outdoor catering in their factory for providing outdoor canteen service - said services do not qualify under exclusion clause of Rule 2(l) of the Cenvat Credit Rules 2004 - credit allowed. Air travel agent service - Held that - The said services has been availed by the officials of the appellant for the purchase sale of their goods with regard to their business. Without these services the appellant cannot manufacture or sell their goods. In that circumstances on this service the appellant is entitled to avail Cenvat Credit - credit allowed. Club membership service - Held that - The amount is meagre and the appellant is not contesting the same - credit denied. Appeal allowed in part.

Summary

Issues:
Appeal against denial of Cenvat credit on group insurance, outdoor catering service, club membership, and travel agent service under Rule 2(l) of Cenvat Credit Rules, 2004.

Analysis:
1. Group Insurance and Outdoor Catering Service:
The Revenue contended that these services are excluded from the definition of input service under Rule 2(l) of the Cenvat Credit Rules. However, the definition of Rule 2(l) states that services used for personal use or consumption of any employee are excluded. The appellant is obligated to provide group insurance and outdoor catering for statutory reasons, not for personal use. Therefore, the exclusion clause does not apply, and the appellant is entitled to avail Cenvat credit for these services.

2. Air Travel Agent Service:
The appellant availed air travel agent services for the purchase and sale of goods related to their business operations. These services are essential for the manufacturing and sale of goods. As per Rule 2(l) of the Cenvat Credit Rules, services used for providing output services qualify as input services. Hence, the appellant is eligible to claim Cenvat credit for air travel agent services.

3. Club Membership Service:
The appellant did not contest the denial of Cenvat credit for club membership service, as the amount involved was insignificant. Therefore, Cenvat credit for club membership service was rightly denied.

In conclusion, the appeals are disposed of based on the above analysis, where the appellant is allowed Cenvat credit for group insurance, outdoor catering, and air travel agent services, while credit for club membership service is denied due to its minimal nature.