Custom, Excise & Service Tax Tribunal
Applied Micro Circuits India Pvt. Ltd vs Commissioner Of Central Excise, ... on 27 October, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No.ST/86074 & 86075/15-Mum (Arising out of Order-in-Appeal No. PUN-SVTAX-000-APP-0015-0016-14-15 dated 03/02/2015 passed by Commissioner of Central Excise (Appeals), Pune-III) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Applied Micro Circuits India Pvt. Ltd. Appellant Vs. Commissioner of Central Excise, Pune-III Respondent Appearance: Shri Sushant L. Yardi, C.A. for Appellant Shri S.L. Kaushik, Assistant Commissioner (AR), for Respondent CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Date of Hearing : 27/10/2015 Date of Decision : --------------- ORDER NO Per: M.V. Ravindran
These two appeals are directed against Order-in-Appeal No. PUN-SVTAX-000-APP-0015-0016-14-15 dated 03/02/2015.
2. Heard both sides and perused the records.
3. The issue involved in this case is regarding the denial of Cenvat Credit to appellants in respect of the service tax liability discharged on outdoor catering services, life insurance and premium. Both the lower authorities have rejected the contention on the ground that after amendment to definition to input services there is no case.
4. Learned Chartered Accountant draws my attention to the facts of this case and submits that the reliance pleased by the lower authorities on definition about the services are used or primarily used for consumption of any employee, while in the case in hand the services which have been received is in respect of outdoor catering for annual conference, life insurance services were for employees use, but the factual position is that these services were rendered in relation to business activity of the appellant. He would submit that in a similar case, this bench in the case of M/s Hindustan Coca Cola Beverages Pvt. Ltd. Vs. Commissioner of Central Excise, Nashik 2014 (12) TMI 596 CESTAT MUMBAI held in favour of assessee. He produces the copy of such order and also submits that the cost of the canteen services and the life insurance services have been included in the value of services rendered by them.
5. Learned departmental representative reiterates the findings of the lower authorities.
6. On perusal of the records, I find that the issue is regarding credit of Service Tax paid on the outdoor catering services and the life insurance services, which were received subsequent the amendment to definition of input services in rule 2 (e) Cenvat Credit Rules, are eligible or otherwise.
7. The relevant portion of the definition of input services in rule 2 (l) of Centvat Credit, during the period in question needs to be considered which is as under.
(l) input service means any service,
(i) used by a provider of output service for providing an output service;
Or
(ii).
And includes Services..
But excludes services:-
(A).
(B) ) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee. It can be seen from the above reproduced definition that there is specific exclusion in respect of outdoor catering services and various other services including life insurance when such services are used for primarily or personnel use of consumption of any employee, in the case as per the case records, the services of outdoor catering and the life insurance services were clearly received for personal use of employees, is not controverted in the grounds of appeal. It is consumed for the personal use, the findings recorded by the first appellate authority in rejecting the appeal are to be reproduced.
as service provided in relation to outdoor catering and life insurance are specifically excluded from the definition of input service, as quoted above, CENVAT credit of Service tax paid on these services taken by the appellant is found to be inadmissible. A decision given by Honble CESTAT has been cited by the appellant in this regard Hindustan Coca-cola Beverages Pvt. Ltd. Vs CCE Nashik. However, nether its citation has been given nor its copy has been submitted by the appellant. Thus, I donot have the benefit of that purported decision mentioned by the appellant and I proceed to decide the issue as per the facts on record and the applicable provisions of law. I am of the view that service tax paid on outdoor catering and life insurance would be eligible for CENVAT credit provided that the said service is used by the company for their operations and not for personal use/consumption of employees. For example, if the output service provider company (like the appellant) receives the services of an outdoor caterer for its annual conference of dealers/Shareholders Meet/etc. Then the service tax paid on the said input services (of outdoor caterers service) would be eligible for CENVAT Credit as the said services were not provided primarily for personal use or consumption of the employees. In the present case, as per the facts on record, the outdoor caterers service and life insurance service were clearly received for Rule 2(l) of the CCR, as quoted above, is squarely applicable and the refund of the Cenvat credit has Been correctly disallowed. Regarding life insurance, I am of the clear view that it is essentially for the personal use of the employee and its benefit goes to the employee or his family. This service has no co-relation or contribution towards the output service being provided by the Appellant. As a company, the appellant may provide many facilities or perks to their employees to retain them in the competitive job market, but such welfare measures donot automatically result in CENVAT credit eligibility. The exclusion clause in the statutory definition of input service will prevail in such circumstances.
8. In view of the factual circumstances as reproduced here in above, I find in the judgment of the tribunal in the case of Hindustan Coca Cola Beverages Pvt. Ltd. (supra) will not carry the case of appellant any further.
9. In view of the forgoing, in the facts of circumstances in the case, I hold that the impugned order is correct and legal, does not require any interference the appeal is devoid on merits and is rejected.
(Operative part pronounced on -------------) (M.V. Ravindran) Member (Judicial) akp 1 5