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2018 (12) TMI 1479 - HC - Central ExciseCENVAT Credit - input services - Group Insurance Health Policy - Real Estate Agent Service - Event Management Service. Group Insurance Health Policy - Held that - On a plain reading of the definition of input services in Rule 2(1) of CENVAT Credit Rules ,2010 as is in existence during the period from April, 2003 to March, 2011, the amounts paid to the Insurance Companies for Insurance of the employees is input service. This is particularly, so as there is no exclusion clause therein, as was provided by the amendment in April, 2011 - taking of Insurance for the employees used in providing output service as it enables the employee to work with a peace of mind - credit allowed. Real Estate Agent Service - Held that - The services of a Real Estate Agent is obtained by the Respondent. This for the purpose of allotting accommodation to its employees when posted at a particular station - This services would be covered by the definition of input services under Rule 2(1) of the CENVAT Credit Rules. These services enable the Respondent to keep its personnel available to provide services at a particular station. Thus, it has a nexus to the output services being provided by the Respondent - Credit allowed. Event Management Service - Held that - These events are held/ organized by the Respondent to target people with high net worth so as to attract/ retain them as their constituents. Thus, these services are in the nature of sales promotion service and would eonomine fall within the inclusive part of definition of input service provided in Rule 2(1) of Cenvat Rules - credit allowed. Appeal dismissed - decided against Revenue.
Issues:
1. Whether Group Insurance Health Policy is an "input service" for CENVAT Credit? 2. Whether Real Estate Agent Service for employee accommodation is an "input service" for CENVAT Credit? 3. Whether Event Management Service for organizing events is an "input service" for CENVAT Credit? Analysis: Issue 1 - Group Insurance Health Policy: The Appellant, a Banking Company, claimed CENVAT Credit for service tax paid on Insurance for its employees. The authorities denied the credit, stating it was for personal benefit. The Tribunal disagreed, citing the definition of input services pre-April 2011. The High Court concurred, noting the absence of an exclusion clause in the earlier rule. It emphasized the incidental benefit to employees and upheld the Tribunal's decision, dismissing the proposed question. Issue 2 - Real Estate Agent Service: The Appellant sought CENVAT Credit for service tax paid to Real Estate Agents for employee accommodation. The authorities denied it, deeming it a personal benefit. The Tribunal, relying on precedents, ruled in favor of the Appellant. The High Court agreed, stating the service enabled the Appellant to provide output services, justifying the credit under Rule 2(1) of the CENVAT Credit Rules. The proposed question was dismissed. Issue 3 - Event Management Service: The Appellant was denied CENVAT Credit for service tax paid on Event Management Services for organizing events. The Tribunal found the events targeted high net worth customers, qualifying as business promotion. Citing relevant cases, the Tribunal allowed the credit. The High Court upheld this decision, emphasizing the sales promotion nature of the services. Without evidence of perversity, the Tribunal's finding was deemed correct, and the proposed question was dismissed. In conclusion, the High Court dismissed the appeal, upholding the Tribunal's decisions on all three issues without costs.
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