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TMI Blog2010 (4) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal - ST/621/2009 - 308/2010 - Dated:- 30-4-2010 - S/Shri M.V. Ravindran, P. Karthikeyan, JJ REPRESENTED BY : Shri B. Shankar, Advocate, for the Appellant. Smt. Joy Kumari Chander, Jt. CDR, for the Respondent. [Order per : P. Karthikeyan, Member (T)]. - The appellants, M/s. Satyam Computer Services Ltd. are registered with the department as provider of various services including information technology software service, consulting engineer service, business auxiliary service, etc. The appellants are engaged mainly in providing information technology service such as customized software development and ERP consultancy. They seek waiver of pre-deposit and stay of recovery of the following dues adjudged against them :- (i) Demand of Cenvat credit of Rs. 6,43,73,664/- along with applicable interest; (ii) Penalty at the rate of 2% per month on the above demand working out to Rs. 5,92,35,267/- under Section 76 of the Finance Act, 1994 (the Act); and (iii) Penalty of Rs. 6,44,00,000/- imposed on the appellants under Section 78 of the Act. The period of dispute is from March 2005 to September 2008. The demand pertains to inadmissible credit ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the work and join those work places where the employees get insurance policy. Therefore, in absence of insurance of employees, it would be next to impossible to carry out our business functionalities without constant disturbances. Therefore, Employee Group Term Life Insurance Policy is an input service utilized in relation to the assessee s business and Cenvat credit is admissible on taxes paid on such services. B. Travel Insurance Premium The assessee insures its employees against any risks they may undergo while travelling during business visits and these travel insurance are used in carrying out the assessee s business. C. Group Medishield and Group Personal Accident Policy The assessee is in a business of knowledge based industry dependent on skilled engineers. In order to attract and retain talent, the assessee pays premium with respect to Group Medishield and Group Personal Accident policies. If such policies are not taken, the Attrition rate would be higher and employees would leave the assessee in the midst of the work and join those work places where the employees get benefits of such policies. Therefore, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Service The assessee is in a business of knowledge based industry dependent on skilled engineers. In order to attract retain talent, the asessee conducts various events and manages it. In this event management, the assessee also promotes its business, does networking, strengthens public relationship and builds stronger relationship among its employees without any regard to hierarchy. These activities reduce the frictions among different levels and encourage the participants and employees to deliver better. As the learned commissioner would appreciate that the business activities of the assessee involves rigorous and hectic schedules and constant mental exercises. In such a business environment to keep the business going, functioning and flourishing properly, the employees are regarded as a great asset to the assessee Company. Therefore, these services are catered to them with only intention of promoting business and derive fresh and healthy services of employees in its business. Therefore, these are the input services utilized to provide assessee s taxable output services and Cenvat credit is admissible on taxes paid on such services. The appellants had canvassed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above interpretation, the expression in relation to could not be extended too far-so far as to cover insurance premium for Director and Officials, Event Management, recreation centers and so on. The Commissioner relied on the decision of CESTAT in the case of Commissioner of C. Ex., Nashik v. Mahindra Sona Ltd. [2008 (10) S.T.R. 256 (Tri. - Mumbai) wherein it was held that the service impugned therein was in the nature of welfare activity and not any activity relating to business and was therefore not covered by the definition of input service . We find that there is no dispute that the credit is admissible of service tax paid on any activity in relation to business. The question is which all services can be held to be used in relation to providing output services. In the case of CCE, Mumbai-V v. M/s. GTC Industries Ltd. [2008-TIOL-1634-CESTAT-MUM-LB = 2008 (12) S.T.R. 468 (Tri.)], the Tribunal held that activities in relation to business cover all the activities that are related to the functioning of business. 4.1 The scope of input service figuring in Rule 2(l) of CCR was interpreted by the Tribunal in the following decisions holding the service(s) dealt with in each came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicle insurance, car rentals, pest control activities 12. M/s. Dr. Reddy s Lab Ltd. v. CCE, Hyderabad [2010-TIOL-194-CESTAT-BANG = 2010 (19) S.T.R. 71 (Tri. - Bang.)] Air travel agent, Rent -a-Cab Operation scheme, Outdoor catering service and servicing of motor vehicle. 4.2 We find that the above decisions held respective input service considered to be input for the final products manufactured, considering the definition of input service envisaging its proximate connection with the manufacture or the inclusive part of the definition as activities relating to the particular business and the peculiar requirements of the business thereof. The appellant is a service tax assessee registered for providing the following services :- Consulting Engineer service, commercial training or coaching service, business auxiliary service, management consultant service, franchisee service, online information and database service, business exhibition service, maintenance repair services, sponsorship service, intellectual property service, manpower recruitment and supply agency services, club membership service, design service, works contract service, renting o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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