2018 (9) TMI 499 - AT - Service Tax

Refund of unutilized CENVAT Credit - most of the output services were being exported by the appellant/ assessee - input services - insurance premiums - Time Limitation - Held that - The issue of availment of input service credit on the service tax paid by them on the insurance premiums on group insurance policy for their employees including the Directors is already covered by this Tribunal s order in their own case M/S EXL SERVICE. COM (INDIA) PVT. LIMITED VERSUS CCE & ST, LTU 2017 (5) TMI 1461 - CESTAT NEW DELHI , where it was held that the appellants are rightly eligible to take credit of service tax paid on insurance premium on Group Insurance Policy, as the said service is an eligible input service - refund allowed. Time Limitation - Held that - Demand is hit by period of limitation as the department has always been aware about the practice being followed by the appellant/assessee - there are no valid reasons for invoking the extended time proviso under Section 73 of the Finance Act, 1994 - demand is also barred by period of limitation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availment of input service credit on insurance premiums
- Denial of credit on advertising, designing, and event management services
- Denial of credit on security services, parking area, outdoor catering, rent-a-cab services
- Eligibility of hospital services for input credit
- Allowance of service tax on air travel agent services and air ticket expenses
- Input credit on maintenance and repair of business premises

Availment of Input Service Credit on Insurance Premiums:
The appellant had availed Cenvat credits on input services, including insurance premiums for employees and directors. The department alleged wrongful availment and refund of credits amounting to a specific sum. The appellant argued that the issue was previously addressed in Tribunal orders and relied on precedents to support their claim. The Tribunal examined the matter and concluded that the appellant's claim on the credit was sustainable, setting aside the order-in-original.

Denial of Credit on Advertising, Designing, and Event Management Services:
The Tribunal reviewed the denial of credit on various services such as advertising, designing, and event management. It considered the nature of these services in connection with the appellant's business activities. Referring to a High Court decision, the Tribunal held that these services were linked to the business of providing taxable output services, thus making the credits available to the appellant.

Denial of Credit on Security, Parking, Catering, and Rent-a-Cab Services:
The denial of credit on security services, parking area, outdoor catering, and rent-a-cab services was also examined. The Tribunal found a direct connection between these services and the appellant's business activities, citing precedents where similar credits were allowed. It concluded that the denial of credit was unjustified and that these services were eligible for input credit.

Eligibility of Hospital Services for Input Credit:
The Tribunal considered hospital services availed by the appellant for their employees as integral to their business expenses. It stated that such services could not be denied for credit, emphasizing their nexus to the output services rendered by the appellant.

Allowance of Service Tax on Air Travel Agent Services and Air Ticket Expenses:
The Tribunal addressed the appellant's claim for service tax paid on air travel agent services and air ticket expenses. It noted the direct nexus of these expenses with the business of output service provided by the appellant, ultimately allowing the service tax on these expenses.

Input Credit on Maintenance and Repair of Business Premises:
Regarding the maintenance and repair of business premises, the Tribunal found that these expenses were borne by the appellant and were essential for their business requirements. It concluded that the service tax paid on such maintenance and repair services was to be allowed as they were connected to the output services provided by the appellant.

In conclusion, the Tribunal allowed the appeal, citing settled issues on input service credit on insurance premiums, and also found the demand to be barred by the period of limitation. The appellant was granted consequential relief, if any, in light of the decision.