Custom, Excise & Service Tax Tribunal
Heartland Information And Consultancy ... vs Commissioner Of Service Tax ... on 23 September, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 21804 / 2014 Appeal(s) Involved: ST/373/2009-DB [Arising out of Order-in-Appeal No. 08/2009 dated 23/01/2009 passed by the Commissioner of Central Excise, Bangalore-II] Heartland Information And Consultancy Services Pvt. Ltd. Plot No. 1/1, Arakere, Bannerghatta Road Bangalore 560 076 Karnataka Appellant(s) Versus Commissioner of Service Tax Bangalore-service Tax 1st To 5th Floor, TTMC Building, Above BMTC Bus Stand, Domlur Bangalore 560 071 Karnataka Respondent(s)
Appearance:
Mr. TR Venkateswaran, Authorized Rep. For the Appellant Mr. R. Gurunathan, AR For the Respondent CORAM:
HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 23/09/2014 Date of Decision: 23/09/2014 Order Per: B.S.V. MURTHY An amount of Rs. 5,34,456/- has been allowed as refund and the refund claim was filed by the appellant for the period May 2006 to March 2007. The issue involved in the order-in-appeal is absence of direct correlation between the input and output service and that there is no nexus between input and output service. The name of the input service, the nature of the output service and justification for eligibility of CENVAT credit as provided by the learned counsel in his submissions today have been briefly reproduced below:
S. No. Input Services Name of output service Nature of view of input service by assessee Justification for availability of CENVAT credit 1 Housekeeping facility Information technology enables services Such services are crucial for the upkeep of the building and the work area of the organization as they have to provide suitable working conditions to its employees so that the medical transcription services may be provided in an effective manner. Hence, these services are used in relation to the provision of output services In the case of CCE, Hyderabad Vs. Deloitte Tax Services India Private Limited (2008-TIOL-629-CESTAT-Bang), it was held that the definition of input services is of wide import and housekeeping services could be termed as input service used for providing output service.
2 Transportation charges Information technology enables services The appellant provides medical transcription services round the clock on a twenty four hours basis and the employees work in shifts. Since, the employees are the backbone of or provision of output export services, transport arrangements for employees from their residence to office and back are provided for employees of all shifts. Hence, these services are used in relation to the provision of output services In the case of CCE, Hyderabad vs. Deloitte Tax Services India Private Limited (2008-TIOL-629-CESTAT-Bang), it was held that the definition of input services is of wide import and housekeeping services could be termed as input service used for providing output service.
3 Outdoor caterer Information technology enables services As mentioned earlier, employees are the backbone for providing the output export service. The appellant strives to provide good food to the employees round the clock since employees operate in night shift also. In case of Victor gaskets India Ltd. Bosch Chassis Systems India Ltd. M/s. Bajaj Electricals Ltd. Vs. CCE, Pune [2008-TIOL-409-CESTAT-MUM], it was held that service tax paid on outdoor catering services is admissible as input service.
4 Management maintenance and repair services (Office Upkeep, AMC & Maintenance for fire equipments, printers, air conditioners, UPS generators and water sewage maintenance) Information technology enables services Maintenance of water sewage is crucial for upkeep of the building and is essential for providing suitable working conditions to its employees.
Fire equipments are required as a measure of safety standards in the organization and the maintenance becomes a crucial factor to keep them up and running in case of any emergency.
Further, equipments like printers, air conditioners, generators, UPS etc are critical for the day to day operations and activities of business and for providing output service. These equipments need frequent maintenance and repairs to keep them running. In Parason Machinery (India) Pvt. Ltd. V. CCE, Aurangabad (2008-TIOL-811-CESTAT-MUM), the court agreed with the appellant that the credit of service tax paid on maintenance of machines should be allowed as eligible credit.
Further, in the case of CCE, Jaipur II V JK cements works [2009-TIOL-411-CESTAT-DEL], it was held that service tax paid in respect of rent/cab services, cellular telephone services, repair of car/motor vehicle service and photography services are input services as they are used in relation to manufacturing and business activity of the respondent.
Also, in the case of M/s Aditya Birla Nuvo Ltd. V. CCEx, Bhavnagar [2009-TIOL-322-CESTAT-AHM], amongst other services it was held that maintenance of fax machines is covered under the category of services enumerated in the definition of input service.
5 Professional & consultancy services Information technology enables services The appellant hires the services of chartered accountants/company secretaries and other consultants to assist in complying with various statutory requirements like professional tax, provident fund, ESI, audits etc. The proper compliance to the statutory requirement is a must to fulfill legal responsibilities of a corporate and hence is vital in the operation of a business. Hence, these services are used in relation to the provision of output services In the case of CCE, Hyderabad vs. Deloitte Tax Services India Private Limited (2008-TIOL-629-CESTAT-Bang), it was held that the definition of input services is of wide import and housekeeping services could be termed as input service used for providing output service.
6 Courier services (Inland) Information technology enables services Courier services are essential for the purpose of sending important communications/data/documents/contracts etc to its customers and its own offices located in various countries and various placed in India.
Communication of various important documents is an essential feature for execution of output services and hence courier services are integral and highly important for efficient performance of the output services.
Courier services are required for the day to day running of the business. Specifically, these services are used for receiving and delivering documents to and from clients that are critical to the provision of output services. It was held in the case of Dell International Services India (P) Ltd. Vs. CCE, Bangalore that courier services qualify to be input services as they are used in activities relating to the provision of output services.
Other decisions in support of our view:
CCE, Hyderabad v Deloitte Tax Services India Private Limited CCL Products India Limited From the above it can be seen that in respect of miscellaneous services involving an amount of Rs.5166 there is no justification given and therefore this has to be disallowed. As regards the remaining services we are satisfied with the relationship between input and output service explained by the learned counsel and accordingly we allow the appeal with consequential relief to the appellant.
(Operative portion of the order has been pronounced in open court on 23.09.2014) (S.K. MOHANTY) JUDICIAL MEMBER (B.S.V. MURTHY) TECHNICAL MEMBER iss