C.S.T. Vs. FORD BUSINESS SERVICES CENTRE PVT. LTD.
LAWS(CE)-2015-1-23
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on January 22,2015

Appellant
VERSUS
Respondents

JUDGEMENT

R.Periasami, Member (T) - (1.)REVENUE filed appeal against the Order -in -Appeal dated 08.12.2009.
(2.)THE brief facts of the case are that the respondents have availed input service credit on Rent -a -Cab Service, Outdoor Catering, Business Auxiliary Service, Insurance service, Pandal & Shamiana, Testing and Analysis, and Health & Fitness Service etc. The adjudicating authority has disallowed the credit of Rs. 26,08,657/ - availed on the above services and confirmed demand along with interest. The respondents filed appeal against the Order -in -Original and the lower appellate authority has set aside the order and allowed their appeal. Revenue filed appeal against the impugned order.
2.1 The Ld. AR reiterates the grounds of appeal and submits that on the input credits on various services has no nexus with the services provided by the respondents. He submits that service tax availed on sodexo coupons is no way related to the business activity of the respondent. It is only free coupons given to their employees. He relies upon the following case laws: - -

"1. CCE, Ahmedabad v. Cadila Healthcare Ltd. : 2013 (30) STR 3 (Guj.)

2. Telco Construction Eqpt. Co. Ltd. v. CCE, Belgaum : 2013 (32) STR 482 (Tri. -Bang.)

Cce, Nagpur v. Ultratech Cement Ltd. : 2010 (20) STR 577 (Bom.)

(3.)MARUTI Suzuki Ltd. v. CCE, Delhi : 2009 (240) ELT 641 (S.C.)"
3. On the other hand, the Ld. Consultant appearing on behalf of the respondents reiterated the findings of the Commissioner (Appeals) and written submissions. He submits that the period involved is prior to the amendment in the definition of the input in CCR and there was no restriction and the definition of input services includes all the activities in relation to the business. He submits that out of the total credit denied, the major amount relates to Rent -a -cab involving Rs. 21,61,989.53 and Insurance service involving Rs. 2,73,710.83, credit pertaining to other services are smaller amounts. He relied upon the Boards Circular dated 29.04.2011, wherein Sl. No. 12 of the said Circular specifically clarified on the Rent -a -cab service that the credit on such service is available prior to the amendment dt. 01.04.2011. Regarding the Insurance service, he submits that as per the Factories Act it is mandatory for them to take insurance for the employees. Regarding outdoor catering, Pandal & Shamiana relates to conduct business meetings which are directly covered under the input services. He relied upon the following decisions in support of his contention.

"1. CCE, Nagpur v. Ultratech Cement Ltd. : 2010 (20) STR 577 (Bom.)

2. CCE, Bangalore v. Stanzen Toyotetsu (I) (P) Ltd. : 2011 (23) STR 444 (Kar.)

3. CCE, Bangalore v. Bell Ceramics Ltd. : 2012 (25) STR 428 (Kar.)"

4. I have carefully considered the submissions on both sides and perused the records and written submissions. The respondents are registered under service tax for rendering output services under Business Auxiliary Service, Consulting Engineers service and online information service. They availed input service credit on Rent -a -Cab Service, Outdoor Catering, Business Auxiliary Service, Insurance service, Pandal & Shamiana, Testing and Analysis, and Health & Fitness Service. The adjudicating authority has disallowed the credit of Rs. 26,08,657/ - wrongly availed by the appellants on these input services. Whereas, the Commissioner (Appeals) allowed the appeal and set aside the order of the adjudicating authority. Revenues main contention in their grounds of appeal is that the above input services have no nexus with the output services provided by the respondents. The period involved in this case relates to 2006 -07 and 2007 -08. In the definition of input service, the cenvat credit was amended w.e.f. 01.04.2011, where the restriction was imposed. On Rent -a -cab service, the Board has already clarified vide Circular No. dated 29.04.2011 at point No. 12 that the credit on Rent -a -Cab service was available for the period prior to 01.04.2011.

"Circular No. dated 29.04.2011

12. Is the credit available on services received before 01.04.2011 on which credit is not allowed now? E.g. rent -a -cab service?

The credit on such service shall be available if its provision had been completed before 01.04.2011."

In view of the above Boards clarification, the respondents are eligible for credit on Rent -a -Cab service. Regarding credit availed on Out -door catering, Insurance service, Pandal and Shamiyana services, testing and analysis, I find from the records that the respondents availed credit on these services for carrying out business activities and business meetings which are related to promotion of their business. In view of the Hon'ble High Court of Bombay judgment in the case of CCE v. Ultratech (supra), the issue has already been settled in favour of the respondents and they are eligible for the credit on the above services.

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