2010 (4) TMI 323 - AT - Service Tax

Cenvat Credit Input Services Cenvat Credit on Shifting of household goods of employees Cenvat Credit on (i) Vehicle Maittenance, (ii) Transportation, installation and maintenance of coolers, (iii) Marketing and publicity services; and (iv) Calibration services and Systems Maintenance services Held that - cenvat credit on (i) Vehicle Maittenance, (ii) Transportation, installation and maintenance of coolers, (iii) Marketing and publicity services; and (iv) Calibration services and Systems Maintenance services is correct and legal and does not suffer from any infirmity - Shifting of household goods of employees is not in any way connected with the business activity of the appellant - Commissioner (Appeals) was correct in rejecting the claim of the assessee company for the credit of service tax paid on the services received on Shifting of household goods of employees

Summary

Issues:
1. Eligibility of Cenvat credit on service tax paid for various services including 'Shifting of household goods of employees.'

Detailed Analysis:

Eligibility of Cenvat Credit:
The case involved two appeals against the Order-in-Appeal, where the assessee, engaged in manufacturing aerated waters, availed Cenvat credit on Service Tax paid for services like vehicle maintenance, transportation, installation, marketing, calibration, etc. A Show Cause Notice was issued questioning the eligibility of Cenvat credit on certain services. The adjudicating authority confirmed demands but allowed credit on some services. The appellant contested the denial of credit for 'Shifting of household goods of employees,' while the Revenue challenged the allowance of credit on other services.

Appellant's Argument:
The appellant contended that paying service tax for shifting employees' household goods was a business necessity as employees were transferred nationwide. They relied on a Bombay High Court case to support their claim, arguing that the same reasoning should apply to other services as well.

Revenue's Argument:
The Revenue argued that the service tax on shifting household goods was not related to the business and should not be allowed. They challenged the Bombay High Court decision cited by the appellant and asserted that other services were directly or indirectly related to the manufacturing business.

Judgment:
The Tribunal analyzed the definition of 'input service' as per the Bombay High Court's interpretation, highlighting five categories relevant to manufacturers. They concluded that services like vehicle maintenance, transportation, marketing, calibration, etc., qualified as input services. However, the service of 'Shifting of household goods of employees' did not fall under any eligible category, as per the High Court's criteria. Therefore, the denial of Cenvat credit for this service was deemed correct. The Tribunal upheld the Order-in-Appeal, rejecting both the appellant's and Revenue's appeals.

In conclusion, the Tribunal dismissed both appeals, affirming the denial of Cenvat credit for 'Shifting of household goods of employees' while upholding the eligibility of credit for other services in line with the High Court's interpretation of 'input service' categories.