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2025 (3) TMI 62 - AT - Service TaxCENVAT Credit - input services - whether or not the disputed services on which the CENVAT credit is taken by the appellants is duly covered under the scope and definition of Rule 2(l) of the CENVAT Credit Rules 2004 as input service ? Catering food and outdoor catering services - HELD THAT - Under the unamended provisions (effective up to 31.03.2011) the phrase activities relating to business was specifically finding place in the inclusive part of the definition of input service . The inclusive definition in a fiscal statute is a well-recognized device to enlarge the meaning of the word defined and it expands the meaning of the basic definition - such an yardstick cannot be applied for the period w.e.f. 01.04.2011, as by way of amendment of the definition of input service certain services like general insurance services Health Insurance outdoor catering beauty treatment health services cosmetic and plastic surgery membership of a club health and fitness centre life insurance health insurance and travel benefits extended to employees etc. were excluded from the purview of definition of input service and in the eventuality when the said excluded category of service(s) are used primarily for personal use or consumption of any employee. In other words CENVAT credit of service tax paid on such service(s) should not be considered as input service entitling an assessee to avail CENVAT credit thereon. Health fitness service - HELD THAT - The records placed in file and sample invoices indicate that these services have been used to keep a check over the wellness or health of a person before taking up the assignment in the appellants company and for taking up job assignments/projects from time to time. Further the invoices have been billed to the company and not for the individuals for their personal consumption. Hence these services are eligible to be considered as input service . Further it is also found that the Tribunal in the case of SITEL India Limited 2016 (3) TMI 203 - CESTAT MUMBAI have held that health and fitness service as eligible input service where the output service is being provided on 24X7 basis which is also the situation in the present case. Interior decorator service - HELD THAT - In the representative sample invoice submitted by the appellants it is shown as the renovation works under taken for the guest house at Vikhroli. No other details are available to relate such renovation or interior decoration work having a relation to the provision of output service either directly or indirectly. Therefore it is unable to agree with the view that in the present case there is sufficient evidence to consider the interior decorator service as an eligible input service. Therefore CENVAT credit to the extent of Rs.6, 93, 107/- relatable to the interior decorator service is not admissible as eligible input service. Packaging services - HELD THAT - The nature of services are mentioned as packing unpacking loading unloading and transportation of household goods for transportation from one location to another with respect to few employees. Though it is claimed by the appellants that such services were used for packaging and movement of various goods procured for use in the provision of output services there are no evidence to such claim in the documents placed in the appeal records or in any of the written submissions given by the appellants. In such a factual position it is unable to find any basis for allowing such services used for personal consumption of employees under the category of eligible input service and therefore consider these services as ineligible input service. Public relations service - People relationship management service - HELD THAT - The Co-ordinate Bench of the Tribunal in the case of Orient Bell Limited 2017 (1) TMI 840 - CESTAT ALLAHABAD have examined the public relations service and have held that these are having an objective of enhancing Brand Value support to Marketing Promotional Initiatives Building Corporate image Creating Awareness etc. to enable the company in providing enhanced output services. In view of the above these services could be considered as eligible input service. Photography service - video tape service - HELD THAT - The adjudicating authority on examination of the invoices submitted before him had given a finding that he is unable find any information other than the name of service provider in order to relate to the output service provided by the appellants. It is unable to examine the factual aspect as no invoices or supporting documents have been produced by the appellants. Therefore these services are not eligible to be considered as eligible input service. Rent-a-Cab service - HELD THAT - The adjudicating authority had given a finding that even though the services have been availed prior to 01.04.2011 that may not be the ground to allow these services as eligible input service. In this regard it is found that it is an undisputed fact that such services have been availed by the appellants for the period upto 31.03.2011 for claiming as eligible input credit and not thereafter. The CBIC in its Circular No.943/4/2011-CX dated 29.04.2011 had clarified that the credit available on rent-a-cab service received before 01.04.2011 should be available as input credit if its provision had been completed before 01.04.2011even though the invoices could have been received subsequently i.e. after 01.04.2011 - Rent-a-Cab services received prior to 01.04.2011 in the present case is eligible input service for taking CENVAT Credit. Ship management services - transport services through waterways - sound recording service - HELD THAT - The adjudicating authority had found that no invoice have been produced by the appellants before him to substantiate the nature of such service and its usage in provision of output service. Further in respect of short term accommodation service the adjudicating authority had found that such stays by the employees traveling for work are more in the nature of personal consumption. It is not required to examine the factual aspect as no invoices or supporting documents have been produced by the appellants for such services - these services are not eligible to be considered as eligible input service. Denial of input credit on the ground that the address of the premises are not included in the registration certificate - HELD THAT - The appellants had submitted a letter for inclusion of unregistered premises in the Service Tax Registration certificate by submission of their application for addition of such addresses to the jurisdictional authority on 17.10.2008. Inasmuch as the process of revising or updation of registered certificate with additional/new addresses for new branches/ office is a deemed approval procedure on intimation basis as priced under Service Tax Rules 1944. Further as the appellants is a regular assessee/ registrant with the Service Tax authorities the input credit cannot be denied on such procedural lapses and that too for the failure to approving such amendments by the department within the prescribed time. Conclusion - i) The impugned order is set aside to the extent it has confirmed the Cenvat demand on the taxable services namely Event Management Mandap Keeper Service General Insurance Insurance Auxiliary Service and GTA Service and the appeal is allowed in favour of the appellant. ii) The Rent-a-Cab services received prior to 01.04.2011 in the present case is eligible input service for taking CENVAT Credit. iii) The input credit cannot be denied on such procedural lapses and that too for the failure to approving such amendments by the department within the prescribed time. Appeal allowed in part.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS Eligibility of Disputed Services as Input Services Relevant Legal Framework and Precedents: Rule 2(l) of the CENVAT Credit Rules, 2004 defines 'input service' and categorizes services into 'means', 'inclusion', and 'exclusion' parts. The eligibility for CENVAT credit depends on whether the service falls under the 'means' or 'inclusion' parts and is not listed in the 'exclusion' part. Court's Interpretation and Reasoning: The Tribunal emphasized examining the nature and purpose of the service in the provision of output services. It noted that the definition of 'input service' underwent amendments, particularly post-01.04.2011, which excluded certain services primarily used for personal consumption. Key Evidence and Findings: The Tribunal analyzed various services such as catering, health & fitness, interior decoration, and packaging services, among others, to determine their eligibility as input services. It relied on representative invoices, previous Tribunal decisions, and CBIC circulars. Application of Law to Facts: For services like catering and health & fitness, the Tribunal found them eligible as they were necessary for the operation of the appellants' business, especially given the 24x7 nature of their IT services. However, services like interior decoration and packaging were deemed ineligible due to lack of evidence linking them to the provision of output services. Treatment of Competing Arguments: The Tribunal considered arguments from both the appellants and the Revenue, weighing the evidence and precedents provided by each side. For instance, it accepted the appellants' reliance on CBIC circulars and previous Tribunal rulings for certain services, while upholding the Revenue's stance on others. Conclusions: The Tribunal concluded that certain services qualified as input services, allowing the appellants to claim CENVAT credit, while others did not meet the criteria. Eligibility of CENVAT Credit for Services Availed Pre-01.04.2011 Relevant Legal Framework and Precedents: The Tribunal referred to the CBIC Circular No.943/4/2011-CX and the Larger Bench decision in TATA Teleservices, which clarified that services availed before 01.04.2011 could be considered for credit if the provision was completed before the amendment. Court's Interpretation and Reasoning: The Tribunal found that services like Rent-a-Cab, availed before the amendment date, were eligible for credit based on the CBIC circular and Tribunal precedents. Key Evidence and Findings: Evidence showed that the services in question were availed and completed before the amendment, supporting the appellants' claim for credit. Application of Law to Facts: The Tribunal applied the legal framework to confirm that services availed before 01.04.2011 were eligible for credit, aligning with the CBIC circular and Tribunal's Larger Bench decision. Treatment of Competing Arguments: The Tribunal addressed the Revenue's argument against the eligibility of pre-amendment services by emphasizing the legal clarity provided by the CBIC circular and the Tribunal's own precedents. Conclusions: The Tribunal allowed CENVAT credit for services availed before 01.04.2011, as they met the criteria set out in the relevant legal framework. Procedural Lapses and Denial of CENVAT Credit Relevant Legal Framework and Precedents: The Tribunal considered the procedural requirements under the Service Tax Rules, 1994, and the implications of non-compliance. Court's Interpretation and Reasoning: The Tribunal noted that procedural lapses, such as failing to update the registration certificate with branch addresses, should not automatically result in the denial of credit if the appellants had made efforts to comply. Key Evidence and Findings: The appellants had submitted applications to update their registration certificate, which the Tribunal found sufficient to demonstrate compliance efforts. Application of Law to Facts: The Tribunal applied the principle that procedural lapses should not lead to substantive denials of credit, especially when the appellants had attempted to rectify the issue. Treatment of Competing Arguments: The Tribunal balanced the procedural requirements against the appellants' compliance efforts, ultimately siding with the appellants due to the lack of significant non-compliance. Conclusions: The Tribunal concluded that procedural lapses did not justify the denial of CENVAT credit in this case. SIGNIFICANT HOLDINGS The Tribunal's significant holdings include:
The Tribunal established core principles regarding the eligibility of services as input services, the impact of procedural lapses, and the application of pre-amendment rules for availing CENVAT credit. The final determination was to partly set aside the impugned order, allowing the appeal in favor of the appellants for the eligible input services while upholding the denial for ineligible services.
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