2019 (7) TMI 1348 - AT - Service Tax

CENVAT credit - input services - event management services received as co-host with SAP - guest house/hotel expenses and chairs/furniture used in their office premises - appellant were engaged in selling and distribution of software SAP - HELD THAT - So far the event management service is concerned, the same have been received by the appellant for jointly hosting the conference/ workshop for canvassing the old and new customers, thus the same is in the nature of sales promotion activity. Accordingly, sales promotion is eligible activity for availing the Cenvat credit - Credit allowed. Guest house/hotel service - HELD THAT - The same have been received in the course of rendering the output service and, hence, the same is eligible input in the business of the appellant. Hence, the appellant is eligible for Cenvat credit on this service also - credit allowed. Cenvat on table, chairs/modular furniture - HELD THAT - The issue is covered in favour of the appellant by the Division Bench of this Tribunal in the case of ICICI LOMBARD GENERAL INSURANCE COMPANY LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI-I 2016 (2) TMI 316 - CESTAT MUMBAI where it was held that Appellant is eligible to avail the CENVAT credit of excise duty paid on Furniture and Fittings - credit allowed. The impugned order is set aside so far the input service is disallowed - The interest and penalty imposed on the appellant is also set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Eligibility for Cenvat credit of event management services
- Eligibility for Cenvat credit of guest house/hotel expenses
- Eligibility for Cenvat credit of chairs/furniture used in office premises

Eligibility for Cenvat credit of event management services:
The appellant, engaged in selling and distributing SAP software, questioned the eligibility for Cenvat credit of event management services received while co-hosting events with SAP. The appellant contended that these services were part of sales promotion activities and directly related to their taxable services. The Tribunal agreed, stating that joint hosting events for promoting business with old and new customers constituted sales promotion, making it an eligible input service for Cenvat credit.

Eligibility for Cenvat credit of guest house/hotel expenses:
Regarding guest house/hotel expenses incurred during staff travel for software implementation and after-sale services, the Commissioner (Appeals) initially deemed it as personal consumption. However, the Tribunal disagreed, recognizing these expenses as essential for rendering taxable output services. Consequently, the Tribunal held that the appellant was eligible for Cenvat credit on these expenses as they were directly related to their business activities.

Eligibility for Cenvat credit of chairs/furniture used in office premises:
The appellant, previously a STPI, imported furniture as a 100% EOU and later paid customs duty upon debonding. They sought Cenvat credit on chairs/modular furniture used in their office, citing similar rulings where such credits were allowed for taxable output services. The Tribunal, referring to past decisions, upheld the eligibility of Cenvat credit on chairs/furniture, as they were necessary for rendering taxable services. The Tribunal set aside the impugned order, allowing the appeal and granting consequential benefits to the appellant.