2019 (11) TMI 1466 - AT - Service Tax

CENVAT Credit - input services - event management services - convention services - courier charges - agency commission services - sponsorship service - nexus between the disputed services and the output services provided by the appellant - HELD THAT - The event management service is availed by the appellant for organising training for the distributors and the investors who are linked with the appellant in connection with the business activities. Since the appellant is mainly engaged in the business of asset management and portfolio management service, the event management service availed by the it for conducting training, meetings etc., will be considered as input service for the purpose of availment of the CENVAT benefit - the Cenvat demand amounting to ₹ 56,41,656/- disallowed by the department cannot be sustained. Convention service provided by the service providers to the appellant - HELD THAT - Those services are in context with hotel accommodation of the employees, booking of the banquet hall, diwali celebration of employees and distributors, courier charges for sending diwali gifts etc. The said services availed on payment of service tax under the accounting head of convention service cannot be considered as input service under un-amended as well as the amended definition of input service contained in Rule 2(l) of the Cenvat credit Rules, 2004 - denial of Cenvat benefit in respect of convention and courier services is proper and justified, being not in conformity with the statutory provisions. Similarly, the appellant had also paid agency commission for purchase of tickets of IPL/movies for the agents and distributors. Such services also cannot be considered as input service for the purpose of availment of the Cenvat benefit - denial justified. Sponsorship of study on IFA s - HELD THAT - The said service was availed by the appellant for the purpose of conducting its business activities during the period 2008-09 to 2010-11. Such services being availed in connection with the activities of business, the benefit of Cenvat credit should be available under the definition of input service, effective up to 31.03.2011. Thus, the credit on sponsorship service amounting to ₹ 12,360/- should be available to the appellant. CENVAT Credit - denial on the ground that the Invoices do not contain service tax number of the vendors - HELD THAT - Under the Reverse Charge Mechanism, challan is considered as legible document for availment Cenvat credit. Thus, denial of such benefit is not proper and justified - Since, the appellant subsequently rectified the invoices issued by the vendors, as asserted, the matter is remanded to the original authority for verification of rectified invoices and thereafter, to consider the issue of extending the benefit of Cenvat credit. CENVAT Credit - Availment of Cenvat credit twice on the same invoices - HELD THAT - The amount of service tax was paid by the service provider in respect of provision of different services. Thus, it cannot be said that the appellant had availed service tax benefit twice on the basis of the said invoices - denial of such benefit is not proper and justified. Cenvat credit for the subsequent month have been utilized towards payment of service tax liability of the preceding month - HELD THAT - If the Credit has been availed after the payment of service tax to the service provider, the same is inconformity with the Cenvat statute - such factual aspects have to be examined at the original stage - matter is remanded to the original authority for verification of the particulars with regard to the availment of credit subsequent to payment of service tax to the service provider. Cenvat credit availed on car hire charges - HELD THAT - Matter is remanded to the original authority to examine the definition of input service and invoices based on which the credit was availed by the appellant - If, the narration provided in the invoice confirming to the definition of input service, the benefit of such credit should be extended. Cenvat credit availed on payment of arrears - HELD THAT - There is substance in the submission of the appellant in support of the fact of payment of service tax - the original authority should examine the fact that the credit was availed after payment of service tax to the service provider. Appeal disposed off.

Summary

Issues involved:
Disputed availment of Cenvat credit on various taxable services during 2008-09 to 2014-15, objections raised by the department regarding nexus between disputed services and output services, non-compliance with Cenvat statute provisions, denial of Cenvat benefit on certain services like event management, convention, courier charges, agency commission, and sponsorship service, procedural lapses in availing Cenvat credit, and the appellant's appeal against the adjudication orders.

Analysis:
The appellant, engaged in asset and portfolio management services, availed Cenvat credit on various taxable services during 2008-09 to 2014-15. The department objected to the credit claiming lack of nexus with output services and non-compliance with Cenvat statute provisions. The appellant argued that disputed services align with the definition of input services under Cenvat Credit Rules, 2004, and submitted explanations for procedural lapses in credit utilization.

The Tribunal examined the disputed services individually. Event management services for distributor and investor training were considered valid input services, justifying the Cenvat credit. However, convention services for hotel accommodation, diwali celebrations, courier charges, and agency commission for IPL/movies tickets were deemed ineligible for Cenvat benefit due to non-alignment with Cenvat statute provisions.

The Tribunal also addressed specific issues raised by the department. Regarding invoices lacking service tax numbers, the appellant rectified the defects, and the Tribunal remanded the matter for further verification. The allegation of availing Cenvat credit twice was dismissed as the services were distinct, and credit utilization for subsequent months' tax liabilities was remanded for verification. The Tribunal also remanded the examination of car hire charges and payment of arrears for compliance with input service definition and proper credit availing.

In conclusion, the Tribunal upheld Cenvat credit for valid input services like event management related to business activities but denied credit for services like convention and agency commission not meeting Cenvat statute provisions. The matter was remanded for further verification on specific issues, and the appeals were disposed of accordingly.