2017 (8) TMI 634 - AT - Service Tax

CENVAT credit - input services - whether the appellant is entitled to cenvat credit of service tax paid on various services in connection with the Annual Day Celebration as well as repair and maintenance of traffic signal at Kariad? - Held that - The definition of input service as provided in Rule 2(I) of the Cenvat Credit Rules 2004 has been given a very wide interpretation by the decision in the case of M/s. Delphi Automotive System Pvt. Ltd. Versus CC CE & ST Noida 2015 (3) TMI 297 - CESTAT NEW DELHI wherein it has been held that an activity relating to the business of the company fall in the definition of input service - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Appeal against disallowance of cenvat credit on various services including repair and maintenance of traffic signal, advertising, security agency service for Annual Day Celebration.

Analysis:
1. Background: The appellant, engaged in Airport Service, Cargo Handling, Renting of Immovable Property, Tour Operator Service, had taken cenvat credit on services like security service for Annual Day Celebrations, repair of signal lights, advertisement charges, etc. The Deputy Commissioner disallowed the cenvat credit, leading to the appeal.

2. Arguments: The appellant's consultant argued that the impugned order did not consider the definition of 'input service' under Rule 2(l) of the Cenvat Credit Rules. He cited judicial precedents and contended that the expenses on various services were integral to airport activities. Specific services like repair of traffic signal and advertising for Annual Day Celebration were highlighted as falling under 'input service' as per previous decisions.

3. Contentions: The appellant claimed that services from various agencies, including Pandal and Shamiana, Games Advertising, and Security Agency, qualified as 'input services' eligible for cenvat credit.

4. Counter-arguments: The learned AR supported the findings of the impugned order, maintaining the disallowance of cenvat credit.

5. Judgment: The Tribunal analyzed whether the services in question qualified as 'input services' for cenvat credit. It noted that the impugned order lacked reasoning on why these services did not fall under the definition of 'input service.' Referring to precedents, the Tribunal interpreted 'input service' broadly, including activities related to the company's business. Consequently, it allowed the appeal, except for the Security Agency Service due to the trivial amount involved. The impugned order's denial of cenvat credit for most services was deemed unsustainable in law.

6. Conclusion: The Tribunal set aside the impugned order, allowing the appellant to avail cenvat credit on various services related to Annual Day Celebration, repair and maintenance of traffic signal, and other essential activities, except for the Security Agency Service.