2019 (2) TMI 748 - AT - Central Excise

CENVAT Credit - various input services - Restaurant Services - short term accommodation services - Membership of club/association service - Tour operator services - Mandap Keeper Services - Outdoor catering services - convention services - denial on account of nexus - Held that - It is not in dispute that all these bills raised were in the name of the appellant (a public sector undertaking) and not in the name of any individual. The actual person who stayed in the accommodation booked or enjoyed the food at the restaurant etc., could be an individual, say, an employee of the appellant firm or somebody else in relation to some business of the appellant. This should not matter as long as the services are in relation to their business. It cannot be said these services are not related to their business activity - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of CENVAT credit on various services availed by the appellant.
2. Interpretation of whether the services are related to the business activities of the appellant.
3. Comparison with previous judgments on similar issues.

Analysis:
The appeal was filed against an Order-in-Appeal seeking to deny CENVAT credit to the appellants for various services used by them, including Restaurant Services, short term accommodation services, Membership of club/association service, Tour operator services, Mandap Keeper Services, Outdoor catering services, and convention services. The department alleged that these services were not related to the business of the appellants but were for personal consumption. The Original Authority confirmed the demands and penalties, which were upheld by the First Appellate Authority, leading to the current appeal.

The appellant's counsel argued that in previous judgments, the bench had allowed credit on similar services, holding that they were connected to the business activities of the appellant and not for personal consumption. The appellant relied on these precedents to support their claim for CENVAT credit on the disputed services. The Departmental Representative reiterated the findings of the lower authorities, opposing the appellant's contentions.

The key question for determination was whether the services availed by the appellant could be considered as relating to their business activities. The Member (Technical) examined the facts and noted that the services were invoiced in the name of the appellant, a public sector undertaking, rather than any individual. It was observed that the actual beneficiaries of the services could be employees or individuals associated with the appellant's business, which should not affect the eligibility for CENVAT credit as long as the services were related to the business. Relying on previous decisions of the bench, the Member held that the appellant was entitled to the credit of CENVAT on the disputed services, setting aside the impugned order and allowing the appeal.

In conclusion, the impugned order denying CENVAT credit on the services availed by the appellant was set aside, and the appeal was allowed based on the finding that the services were indeed related to the business activities of the appellant, in line with previous judgments on similar issues.