Custom, Excise & Service Tax Tribunal
M/S Ibm India Private Limited vs Commissioner Of Central Excise, ... on 2 January, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No . 20025 / 2014 Appeal(s) Involved: ST/594/2009-SM [Arising out of Order-in-Appeal No. 13/2009 dated 30/03/2009 passed by Commissioner (Appeals), Larger Tax Payer Unit, Bangalore] M/s IBM INDIA PRIVATE LIMITED SUBRAMANYA ARCADE,NO.12 BANNERGHATTA ROAD, BANGALORE-560029. Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax , BANGALORE-LTU 100 FT RING ROAD JSS TOWERS, BANASHANKARI-III STAGE, BANGALORE -560085 Respondent(s)
Appearance:
Mr. Y. Madhav, C.A. For the Appellant Ms. Sabrina Cano, Superintendent(AR) For the Respondent CORAM:
HONBLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER ________________________________________ Date of Hearing: 02/01/2014 Date of Decision: 02/01/2014 Cenvat credit of service tax paid has been denied on outdoor catering service, convention service, event management service and market research service totaling to Rs. 5,29,647/- availed during the period from April 2006 to March 2007. Penalty of Rs. 1,30,000/- also has been imposed on the appellant under Rule 15 of Cenvat Credit Rules, 2004.
2. I propose to discuss each service as follows:-
Outdoor Catering Service : An amount of Rs. 2,37,854/- has been denied under this service. The whole amount has been taken under two invoices issued by The Indian Hotels Co. Ltd. and SHRM Food & Allied Services Pvt. Ltd. The objection raised by Revenue was that credit was taken under outdoor catering service whereas the services received by appellants could not be classified under that heading. The credit of service tax paid on outdoor catering service cannot be denied since reclassification of services is to be considered at the receiving end. Therefore, what is required to be considered at the receiving end is whether service tax was paid or not; and whether the services received were covered under the definition of input service or not. In the absence of clear finding whether services received were covered by the definition of input service, the ground on which credit denied cannot be sustained. In any case, after going through the invoices, I find that services were received for business promotion and sales promotion of the appellant and therefore, credit of service tax paid cannot be denied.
Convention Cervice : An amount of Rs. 1,37,700/- has been denied on the ground that it was not actually outdoor catering service. Credit of service tax paid on this service cannot be denied since reclassification of service is to be considered at the receiving end. What is required to be considered at the receiving end is whether the service was covered by input service under Cenvat Credit Rules or not; and under which category invoices have been issued. In any case, invoices were issued by two Hotels in relation to activities of sales promotion / business of the appellant. Therefore, appellant is eligible for credit of service tax paid.
Event Management Service : An amount of Rs. 91,669/- has been denied. Learned Chartered Accountant submits that the entire amount is in relation to one invoice. Since event management service was rendered for their customers and employees and it was done for sales promotion / business of the appellants, I consider that credit of service tax paid on this service cannot be denied.
Market Research Service : Credit of service tax paid amounting to Rs. 62,424/- has been denied. Learned Chartered Accountant submits that company conducted a survey to find out about women employees leadership. I do not understand and appreciate on what basis and under which manner this service can be covered by definition of input service. I find this activity undertaken by appellant to understand the position of women in society has nothing to do with the business. This being the case, credit has been correctly denied.
3. As regards penalty, I find that the issue is debatable and interpretation of law & definition of service. Therefore, in my opinion, in this case, penalty is not imposable.
4. The appeal is decided in above terms. (Pronounced and dictated in open court) (B.S.V. MURTHY) TECHNICAL MEMBER /vc/