2015 (8) TMI 743 - AT - Service Tax

Denial of CENVAT Credit - whether Training/guesthouse maintenance services provided to the appellant by M/s J & G Corporate Solution would qualify as input service for availing Cenvat credit - the appellant did not produce the copy of the agreement with J & G Corporate Solutions (P) Ltd - Held that - Guesthouse maintenance service qualifies for input service credit if such services are related to the business activity of the assessee. In the present case, the appellants are engaged in rendering telecommunication services and the facility of housekeeping/maintenance of guesthouse is a facility provided for the purposes of its employees or guests who were traveling for work purposes. - services of Housekeeping / maintenance of guesthouse provided by M/s J & G Corporate Solution Pvt. Ltd. qualifies as input service and the appellants are eligible for the benefit of Cenvat Credit. - Decided in favour of assessee.

Summary

Issues:
Disallowance of input service credit on various services availed by the appellant under service tax registration.

Analysis:
The appellant, engaged in rendering telephone services, faced a show cause notice alleging that certain input service credits did not qualify under Rule 2 (l) of Cenvat Credit rules, 2004. The notice detailed disallowed credits for services like training programs, guest house maintenance, photocopy charges, and reimbursement of off-roll employees' expenses.

The Order-in-Original disallowed several credits, including housekeeping charges from M/s J&G Corporate Solutions and photo copy charges. The Commissioner (Appeals) allowed credit for housekeeping services from M/s Sunrise Housekeeping And Support Services but disallowed the credit for services from J&G Corporate Solutions. The appellant appealed against the disallowed credit of Rs. 2,79,470 for housekeeping services from J&G Corporate Solutions.

The main issue was whether the services provided by M/s J&G Corporate Solutions qualified as input services for availing Cenvat credit. Despite similar services from another provider being accepted, the credit from J&G Corporate Solutions was disallowed due to a missing agreement copy. However, the Commissioner (Appeals) found in the agreement that the services provided did not fall under the definition of input service, contradicting a previous decision regarding similar services.

The appellant cited judgments supporting the qualification of guesthouse maintenance services as input services if related to business activities. As the appellant provided telecommunication services and the guesthouse maintenance was for employees or work-related guests, it was argued that the services qualified for input service credit.

Following the legal precedents, it was concluded that the housekeeping and maintenance services provided by M/s J&G Corporate Solutions qualified as input services, making the appellant eligible for Cenvat Credit. The appeal was allowed, providing consequential relief to the appellant.