2018 (1) TMI 111 - AT - Service Tax

CENVAT credit - Pantry Boy Service/Catering Service - Event Management Services - Held that - both the services are related to the business of the respondent and they have received the benefit of the same directly or indirectly in the rendering of their Output Taxable Services - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Allowance of Cenvat credit for Pantry Boy Service/Catering Service and Event Management Services.

Analysis:
The judgment revolves around the appeal made by the Revenue against the allowance of Cenvat credit for Pantry Boy Service/Catering Service and Event Management Services availed by the respondent, a provider of taxable services. The Revenue objected to the credit, arguing that these services did not play a role in providing output services. The Commissioner (Appeals) allowed the credit, stating that Event Management Services were received for business promotion and recovered under "Advertisement and Sales Promotion," while Pantry Boy Service qualified as input services for maintaining a clean office environment essential for output services. The ruling of this Tribunal in a previous case was cited to support the decision.

The Revenue contended that Event Management Services were not essential for providing output services and might be organized for non-business purposes. Similarly, Pantry Boy Service was argued to be Manpower Recruitment and Supply Services rather than directly linked to output operations. The Revenue sought to disallow the credit for these services due to the lack of a direct link to providing output services.

The Respondent's counsel referred to previous Tribunal rulings in similar cases, such as HCL Technologies Ltd., where services like Renting of Equipment for Event Management and Pantry Boy Services were considered allowable Input Services. These rulings emphasized the wide definition of Input Services under Rule 2(l) of CCR, covering services used directly or indirectly in rendering output services.

After considering the arguments, the judgment concluded that both services were related to the respondent's business and benefited their output taxable services directly or indirectly. The Commissioner (Appeals) decision to allow Cenvat credit for the services was upheld, dismissing the Revenue's appeal. The Respondent was deemed entitled to any consequential benefits in accordance with the law.