2019 (3) TMI 1485 - AT - Central Excise

CENVAT credit - input services - facility services rendered by M/s. G4S Facility Services - demand has been confirmed alleging that the services provided are in the nature of front office service, gardening service, canteen facilities gym room equipment maintenance etc. - It is the case of the department that some of these services are used for personal consumption and therefore are not eligible for credit. Held that - Indeed the annexure to the agreement shows that the payment is based on man hours of the work. So also it is stated that in case the manpower works on Sundays and holidays, they have to pay charges on pro-rata basis. So also when additional manpower is required, charges is to be paid on pro-rata - in page 202 of the appeal memorandum a letter issued by Lenovo to G4S Facility Services dated 30.8.2007 is enclosed. This is a letter of amendment of the Annexure I of the agreement. It is stated in this letter that five more headcounts to G4S Facility Services are to be added and the salary of the receptionist post is to be increased. Thus, it is seen that Lenovo has requested for increase of headcounts (person). The requirement of such manpower is for catering services etc. In such case, they would qualify as input service. However, this argument requires to be examined. There is no discussion in the orders passed by the authorities below as to whether the services availed is in the nature of manpower recruitment and supply agency service. The appellant has not raised this contention before the authorities. For this purpose of verification, whether the services availed from G4S Facility Service is in the nature of manpower recruitment and supply agency service, the matter is remanded to the adjudicating authority who is directed to look into the documents and also consider the plea of the appellant in this regard - appeal allowed by way of remand.

Summary

Issues:
Disallowed CENVAT credit for various services availed by the appellant, specifically from G4S Facility Services.

Analysis:
The case involved the disallowance of CENVAT credit for services availed by the appellant, focusing on the services provided by G4S Facility Services. The appellant contended that the services were in the nature of Manpower Recruitment and Supply Agency Service based on the agreement between them and G4S. The agreement detailed services like front office, housekeeping, canteen facilities, etc., which the appellant argued were for manpower to execute various works. Payment was based on man-hours, indicating a supply of manpower. The appellant asserted that since the service period was post-2012, classification of service was not necessary, and all services not in the negative list were taxable. The appellant argued that the credit was rightfully claimed.

The respondent, however, supported the original order's findings, stating that the services provided by G4S were not manpower recruitment or supply agency services. The respondent highlighted services like canteen facilities and gym maintenance, which were excluded from input services. The respondent also pointed out that the appellant's plea regarding the nature of services was raised for the first time and required verification.

After hearing both sides, the Tribunal considered the issue of disallowance of credit for services from G4S Facility Services amounting to ?6,60,381. The Tribunal noted the arguments presented by both parties and examined the annexure to the agreement, which indicated payment based on man-hours and additional manpower requirements. A letter from Lenovo to G4S Facility Services requesting additional headcounts for catering services was also considered. However, the Tribunal observed that the nature of services as manpower recruitment and supply agency service was not discussed in previous orders, and the appellant had not raised this contention earlier. Therefore, the matter was remanded to the adjudicating authority for verification, directing a review of documents and the appellant's plea. The impugned order was set aside to that extent, and the appeal was allowed by way of remand.