Custom, Excise & Service Tax Tribunal
Warburg Pincus India Pvt Ltd vs Commr.Service Tax- Ii Mumbai on 5 July, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
WEST ZONAL BENCH, MUMBAI
Service Tax Appeal No. 86404 of 2015
(Arising out of Order-in-Appeal No. SR/08/ST-1/2015 dated March 31,2015 passed
by the Commissioner of Service Tax (Appeals)-I, Utpad Shulk Bhavan, BKC,
Mumbai)
........Appellant
WARBURG PINCUS INDIA PVT. LTD.
7th Floor, Express Towers,
Nariman Point, Mumbai-400021.
VERSUS
Commissioner of Service Tax-II, Mumbai, ........Respondent
4th Floor, New Central Excise Bldg.,
Maharshi Karve Road,
Churchgate, Mumbai-400020.
APPERANCE:
Shri Narendra Dave, Advocate for the Appellant
Shri S.B. Mane, Asst. Commissioner, Authorised Representative for the
Respondent
CORAM:
HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL)
FINAL ORDER NO. A/86207/2019
Date of Hearing: 11-03-2019
Date of Decision: 05-07-2019
Appeal No. ST/86404/2015
2
DR. SUVENDU KUMAR PATI:
The narrow compass in which the issue has raised in the
Tribunal states its inadmissibility of Cenvat Credit to the Appellant on
Tax paid on "Club and Association Services" for which refund of ₹
12,00,090/- was refused to the Appellant in the Order-In-Original that
attained finality in the Order-In-Appeal.
2. Factual back drop of the case, in brief, is that Appellant is
a company engaged in providing business advisory services, solely to
M/s. Warburg Pincus, USA and it sought for refund of unutilized
Cenvat Credit of ₹ 2,86,61,581/- under Rule 5 of the Cenvat Credit
Rule 2004 for the period October 2006 to September 2009 out of
which the above referred service and "Mandap Keeping Service" were
held as inadmissibility by refund sanctioning authority. The
Commissioner of Service Tax(Appeals)-I, Mumbai Zone allowed
refund on Mandap Keeper Service but refused refund on Service Tax
paid on Club and Association Services. Appellant assailed the order
of rejection of such refund on Club and association Services on the
ground that credit was not admissible before this Tribunal.
3. In the memo of appeal and during the course of hearing
of appeal, Learned Counsel for the Appellant Mr. Narendra Dare
submitted that the nature of service provided by it requires enormous
Appeal No. ST/86404/2015
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research work and collection of statistical data as well as analysis of
market and industry condition that requires frequent participation in
seminar, discussion and meeting on business related matter for which
it took Corporate Membership of Gymkhana Club to facilitate holding
of such seminar and discussion etc. and the same is integrally
connected to investment Advisory Service provided by the appellant.
In citing the decisions of the Tribunal, Mumbai in the case of Coca
Cola India Pvt. Ltd. Vs CCE 2009 (242) ELT 168 (Bom.) & CCE Vs
Ultratech Cement Ltd. 2010 (20) STR 577 (Bom.), learned Counsel
further contended that during the relevant period under Rule 2(l) of
the Cenvat Credit Rule 2004, "activities relating to business" was
covering the activities connected with the business of the Apellant and
the scope of definition was wide enough to cover every services used
in the business of the Appellant which was well placed before the
Commissioner (Appeals) who also recorded the same in his findings
contained in para 3 of the OIO that the Appellant was required to
gather proper statistical data with respect to proposed investment
opportunities and its association in Business Forum organistion was
to get opportunity for attending seminar, discussion, meeting on
business related matters for which Corporate Membership of Bombay
Gymkhana was taken and hotels were used to hire Banquet
conference rooms and therefore the credit was admissible.
Appeal No. ST/86404/2015
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4. Further submission of Learned Counsel for the Appellant
is that solely borrowing the ratio of Telco Construction Equipment Co.
Ltd. judgment reported in 2013 (32) S.T.R. 482 (Tri. - Bang.) in an
erroneous way, Learned Commissioner (Appeals) had refused the
refund but the said judgment is clearly distinguishable as in para 9.1
of said judgment, it has been clearly reflected that membership of
any employee of the assessee in Bangalore club is not an activity
relating to business but in the case of Appellant it was Corporate
Membership taken for the Appellant's Company and not for any
individual employee for which in the Appellant's own case (report in
208 T.I.O.L. 1229 CESTAT, Mumbai) in respect of other period,
Hon'ble single Member of CESTAT, Mumbai had allowed the refund
holding the said credit as admissible. He prayed to set aside the order
of rejection of refund of the Commissioner (Appeals) on such
availment of credit on Club & Association Services.
5. In response to such submission, Learned Authorised
Representative for the Respondent Department Mr. S.B. Mane, Asst.
Commissioner argued in support of the reasoning and rationality of
order passed by the Commissioner (Appeals) and in citing Telco
Construction Equipment Co. Ltd. judgment, he submitted that the
activity related to the business requires establishment of integral
connection between service rendered and service taken by the
Appeal No. ST/86404/2015
5
Appellant which was not done in a proper way for which interference
in the order passed by the Commissioner (Appeals) is uncalled for.
6. Heard from the both the sides at length and perused the
case record, written submission and relied upon judgments. It is
observed that in the Appellant's own case reported in2018-TIOL-
1229-CESTAT Zonal Bench of Mumbai on 20-02-2018 had made an
observation that the services in question were directly used by the
service provider and credit was, therefore admissible. A thorough
reading of judgment of Telco Construction Equipment Co. Ltd. cited
Supra, it is seen that denial of such input of Club and Association
Services was made on the basis of the findings that Corporate
Membership was taken in Bangalore Club but Appellant failed to
substantiate that the membership was taken for official purpose or
was related to business activities for which the decision of the
Commissioner holding that membership was taken for the employees
was held tobe valid. In the Appellant's case, on the other hand the
Commissioner had not disputed that the membership was not taken
for business activities of the Appellant but he accepted the contention
of the Appellant in Para 3(ii) of his order that respondent was required
to get proper statistical data for proposed investment opportunities
and the same can be gathered through participation in associating
itself in any organisation/ business forum /trade association. In the
circumstances and in carrying further judicial precedent as well as in
Appeal No. ST/86404/2015
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furtherance of maintaining certainty and predictability in the decision
making process that had held the eligibility of credit on such input
service as admissible in the Appellant's own case, the following order
is passed.
ORDER
7. The Appeal is allowed and the order passed by the Commissioner of Service Tax (Appeals) in Order-in-Appeal No. SR/08/ST-1/2015 dated March 31, 2015 relating to inadmissibility of Cenvat Credit on tax paid on Club and Association Service is hereby set aside. Appellant is entitled to get refund of ₹ 12,00,090/- with applicable interest which Respondent Department is directed to release within 3 months of receipt of this order.
(Order pronounced in the court on 05-07-2019) (Dr. Suvendu Kumar Pati) Member (Judicial) John