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TMI Blog2019 (9) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be a service recipient. If the employees were not a service recipient, no amounts would have been recovered from them and no service tax would have been paid on the same. Conversely, the appellant cannot get any exemption from payment of service tax if he has rendered services, even if such services are rendered to their own employees for a consideration - CENVAT Credit allowed. CENVAT Credit - credit available on the basis of debit notes which are not eligible documents - Rule 9 of CCR, 2004 - HELD THAT:- The learned counsel has taken me through samples of the documents to demonstrate that credit was not taken on debit notes by them. Debit notes were only raised by them on their employees to recover amounts. They have not availed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit wrongly availed along with interest under section 75 of the Finance Act, 1994. Further, penalty was proposed to be imposed upon them under section 78 of the Finance Act, 1994. The show cause notice also alleged that the appellant had availed Cenvat credit on the basis of debit notes which are ot eligible documents for availing Cenvat credit under Rule 9 of CCR, 2004. The appellant contested the demand. After following due process, the original authority, vide OIO No.15/2017 dt.29.11.2017, confirmed the demands and imposed penalties as proposed. Aggrieved, the appellant appealed before the first appellate authority who rejected their appeal and upheld the order of the lower authority. Hence this appeal. 3. Learned counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed services are concerned, are their service recipients. It is true that they are otherwise their own employees but as far as these services are concerned, they are service recipients. They have collected amounts for the services provided by them such as internet services, d2h services, etc., and paid appropriate service tax on the same. In order to render these services to their employees they had to use the input services of the internet service provider, Tatasky d2h service provider etc. Therefore, they are not covered by the exclusion under claus (C) of Rule 2(l) of CCR, 2004. 5. As far as the second allegation is concerned, he would submit this is factually incorrect. They have availed Cenvat credit on the basis of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumption of an employee per se and rather shall be a constituent to the taxable service provided to an employee. The status of the employee would be as a service recipient rather than as a mere employee when consuming such output service. The valuation of the service so provided by the employer to the employee shall be determined as per the extant rules in this regard. 7. He would submit that they have relied on this draft circular before the original authority as well as the first appellate authority, both of whom have rejected it on the ground that it was only a draft circular which was never finally issued and hence is not binding on the department. He would submit that nevertheless, as far as the input services in dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records. What is relevant in this case is the nature of the services on which Cenvat credit has been availed and the manner in which such services were used. As held by the larger bench in the case of Wipro Ltd (supra) and as is clear from the provisions to Rule 2(l) read with clause (C) thereof, no Cenvat credit can be availed on any input service if the same is used for personal consumption of the employees. The appellant s argument is that they are not providing these services to their employees for personal consumption as their employees but are selling these services to them. In other words, they are obtaining the input services from the internet service provider, D2H operator etc., and are further selling these services to their emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith respect to this equation are concerned, the appellant is bound to pay service tax on the services rendered to their employees for a consideration and is entitled to avail credit on input services on the relevant services. I, therefore, find that the appellant is entitled to the Cenvat credit on the disputed amounts. 10. As far as the second issue of credit being availed based on debit notes is concerned, learned counsel has taken me through samples of the documents to demonstrate that credit was not taken on debit notes by them. Debit notes were only raised by them on their employees to recover amounts. They have not availed any Cenvat credit on the basis of such debit notes. In view of the above, I find that the demand is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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