Club Membership and Design Services Eligible for Cenvat Credit: CESTAT Mumbai

Overseas Infrastructure Alliance (India) Private Limited Vs Commissioner of CGST (CESTAT Mumbai)

Summary: CESTAT Mumbai allowed the appeals filed by Overseas Infrastructure Alliance (India) Private Limited concerning refund of accumulated Cenvat credit on input services used for export of Erection, Commissioning and Installation Services to African countries. The appellant had filed two refund claims under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE(NT) dated 18.06.2012, amounting to Rs.1,97,05,122/- for January-March 2016 and Rs.46,22,646/- for April-June 2016.

The Commissioner (Appeals) allowed credit on most services but denied it for Club or Association Membership Service, Design Service and Sponsorship Service. Regarding Sponsorship Service involving credit of Rs.8,56,800/-, the Tribunal noted that the adjudicating authority had already granted proportionate relief and that neither the appellant nor Revenue had challenged that finding before the Commissioner (Appeals).

Relying on CCE, Bangalore vs. Mavenir Systems Pvt. Ltd., the Tribunal held that the Commissioner could not travel beyond the scope and ambit of the appeal and therefore ignored the findings concerning Sponsorship Service. For Club or Association Membership Service, involving Rs.77,875/-, the Tribunal observed that the exclusion under Rule 2(l) applied when the service was primarily for an employee’s personal use or consumption. The Department had produced no evidence showing personal use by any employee.