2017 (1) TMI 1176 - AT - Central Excise

CENVAT credit - input services - membership fees paid to Young Entrepreneurs Organization - Convention Services - Risk Advisory Services - C & F services - Held that - It is indeed definite that seminars, training programmes are essential for improving the competency, skill and calibre of the directors which would improve the business of the appellant company also - service tax paid on membership fees of Young Entrepreneurs Organization is eligible for credit. Convention service - Risk advisory services - Held that - these services are directly connected with the sales promotion as well as procurement of inputs - credit allowed. C & F agents - Held that - it is seen in the Order-in-Original that the appellant has not furnished the relevant documents for consideration of this issue before the original authority - matter remanded to to the adjudicating authority to consider whether the appellant is eligible for credit of full amount of service tax or to the reduced portion. Appeal partly allowed - part matter on remand.

Summary

Issues Involved:
Disallowed credit on certain input services, eligibility of credit on membership fees, convention services, risk advisory services, and service tax paid to C & F agents.

Analysis:

1. The appellant filed an appeal against the Commissioner (Appeals) order disallowing credit on specific input services. The original authority disallowed the credit, confirmed the demand, and imposed a penalty. The appellant contested the disallowance before the Tribunal.

2. The appellant's counsel argued that the disputed input services included membership fees paid to Young Entrepreneurs Organization, convention services, risk advisory services, and service tax on C & F services. The appellant conceded on issues related to repair, maintenance, and insurance of motor vehicles.

3. The counsel contended that the membership fees to Young Entrepreneurs Organization were justifiable as the organization enhanced the competitiveness of young entrepreneurs, benefiting the company. Convention services were used for customer meetings, and risk advisory services aided in procurement and risk assessment. Regarding C & F services, the appellant claimed full credit on service tax paid, despite deductions in the service value by agents.

4. The Respondent's representative argued against allowing credit for membership in Young Entrepreneurs Organization, convention services, risk advisory services, and full service tax paid to C & F agents, asserting no direct nexus with manufacturing activities.

5. After hearing both sides, the Tribunal found the services provided by Young Entrepreneurs Organization, convention services, and risk advisory services directly related to sales promotion and procurement, allowing credit for these services. However, the eligibility for full credit on service tax paid to C & F agents required further verification due to lack of supporting documents.

6. The Tribunal remanded the issue of credit on service tax paid to C & F agents to the adjudicating authority for verification. The appellant was directed to provide evidence supporting their claim. The impugned order was modified to set aside the demand for membership fees, convention services, and risk advisory services.

7. In conclusion, the Tribunal partially allowed the appeal, granting relief on specific input services while remanding the issue of service tax paid to C & F agents for further examination by the adjudicating authority.