Denial of CENVAT credit merely because invoice didn’t mentioned event details is unjustified

Commissioner, Central Excise & CGST Vs Trinetra Cement Limited (CESTAT Delhi)

CESTAT Delhi held that denial of CENVAT credit of ‘event management services’ merely because invoice didn’t mention what event was being organized is unjustified.

Facts- The appellant submits that the Event Management services were availed in relation to events such as annual award and other functions organized for its dealers based on their sales performance. Such awards, incentivize and improve sales performance. Learned Commissioner rejected the claim on the ground that the invoices do not mention any event and this was because the event manager does not give the details of the event and therefore, the claim of the appellant cannot be rejected on this ground.

Further, the appellant submits that the CENVAT credit on mandap keeper services was availed for the hotels and restaurant services for the functions and programmes held for dealers and customers and hence they fall under the definition of ‘sales promotion‘ and ‘market research‘. Therefore, credit should be allowed. The Commissioner wrongly denied the CENVAT credit on the ground that one of the bills under this head is for food charges for 11 persons and it is not clear whether any business meet was held or not.

Conclusion- Held that when one hires a service provider, he may not always indicate in detail the programme which is being organized. Instead, he indicates the services which he provided and the name of the client. In our considered view, the services rendered towards the annual awards or other programmes for the dealers have a direct nexus to sales promotion and CENVAT credit is admissible on such services. Accordingly, we allow CENVAT credit of Rs. 34,800/- availed by the appellant on these services.

Held that if the invoice was issued to the appellant and it was for food for 1100 persons and the appellant claims that it was for their business function, there is no reason to doubt and say that it was for a private function in the absence of any evidence that the invoice meant for a personal function was shown as an invoice for official meeting and billed to the appellant. We, therefore, hold that the appellant was entitled to CENVAT credit of this amount.

FULL TEXT OF THE CESTAT DELHI ORDER

These two cross appeals have been filed by M/s. Trinetra Cement (now India Cements)¹ and the Revenue assailing the same Order-in-Original² dated 26.2.2019 passed by the Commissioner of Central Excise CGST & CENTRAL EXCISE – Udaipur, in which he decided the Show Cause Notice³ dated 7.5.2018 dropping the proposal to deny CENVAT credit on the Advertising services and confirming the proposal to deny CENVAT credit on the remaining services. The operative part of the impugned order is as follows:

“(i) I allow Cenvat credit of Rs. 1,69,05,378/- (Rs. One Crore sixty nine lakh five thousand three hundred seventy eight only) to M/s Trinetra Cement Ltd. (Now known M/s India Cement Ltd) Village – Vajwana, Distt. – Banswara.

(ii) I disallow Cenvat credit of Rs. 50,37,075/- (Rs. Fifty lakh thirty seven thousand seventy five only) and order it to be recovered from M/s Trinetra Cement Ltd (Now known M/s India Cement Ltd) Village – Vajwana, Distt. – Banswara under Rule 14 (1) (ii) of the Cenvat Credit Rules, 2004 read with provisions of Section 11A (1) of Central Excise Act, 1944 and Section 174 of the Central Goods and Service Tax Act, 2017.

(iii) I order to recover the interest at applicable rates on Rs. 50,37,075/- [from M/s Trinetra Cement Ltd (Now known M/s India Cement Ltd) Village – Vajwana, Distt. – Banswara under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AA of Central Excise Act, 1944.

(iv) I impose penalty of Rs. 5,00,000/- (Rs. Five lakh only) under Rule 15 (1) of Cenvat Credit Rules, 2004 read with Section 11AC (1) (a) of Central Excise Act 1944 on M/s Trinetra Cement Ltd (now known M/s India Cement Ltd) Village – Vajwana, Distt. – Banswara.

(v) the above order is passed in terms of the provisions of Section 174 read with Section 142 (8) (a) of Central Goods & Service Tax Act, 2017.

2. Revenue‘s appeal E/51610/2019 assails the allowing of CENVAT credit on ‗Advertising Services‘ while the Assessee‘s appeal E/52298/2019 assails the denial of CENVAT credit on other services, invocation of extended period of limitation and imposition of penalty. It also challenges the jurisdiction of the Commissioner to issue the SCN and issue the impugned order. We have considered the submissions by Shri Sanjay Singh, learned authorised representative for the Revenue and Ms. Asmita Singh, Learned counsel for the assessee and perused the appeals.

3. During the relevant period, the assessee, M/s. Trinetra Cements, Rajasthan was a subsidiary of M/s. India Cements; it manufactured cement and clinker and availed CENVAT credit of the excise duty paid on its inputs and service tax paid on its input services including the service tax passed on to it by its head office in Gujarat through input service distributor invoices under the CENVAT Credit Rules, 2004⁴. Its head office in Gujarat was registered as an Input Service Distributor⁵ under the Service Tax Rules, 1994 and issued ISD invoices distributing the service tax paid on various services to its manufacturing units including the appellant. The appellant availed CENVAT credit on the basis of such ISD invoices some of which is in dispute in these appeals. The following questions arise in these two appeals which we proceed to decide:

a) Did the Commissioner have jurisdiction to issue the SCN and pass the impugned order?

b) Was the CENVAT credit on advertising services correctly allowed by the Commissioner?

c) Was the CENVAT credit correctly denied by the Commissioner on Business Auxiliary Services, services of hotels and restaurants, event management services, mandap keeper services and tour operator Services?

d) Was extended period of limitation correctly invoked in the matter?

e) Was the penalty correctly imposed by the Commissioner?

Jurisdiction

4. Learned counsel for the appellant submitted that the appellant was entitled to take CENVAT credit on the ISD invoices issued by its head office in Gujarat and if the ISD invoices were issued passing on CENVAT credit on ineligible services, the notice should have been issued to the head office in Gujarat and not to the appellant in Rajasthan. According to the learned counsel, once an ISD invoice is issued in its favour, the appellant is entitled to CENVAT credit and the eligibility of the CENVAT credit on the service cannot be questioned at the end of the appellant. Further, according to the learned counsel, since the Commissioner had jurisdiction over Rajasthan where the appellant is located and had no jurisdiction over Gujarat where its head office is located, the Commissioner had no jurisdiction in the matter. Learned counsel relied on the following case laws:

1. Commissioner of Central Excise versus MDS Switchgear Ltd.⁶

2. Commissioner of Service Tax versus Godfrey Philips Ltd.⁷

5. Learned authorised representative for the Revenue asserts that the Commissioner indeed have jurisdiction and has correctly issued the SCN to deny the CENVAT credit to the appellant as the appellant was within his jurisdiction. According to learned authorised representative, irregularly availed CENVAT credit can be recovered under Rule 14 of the CCR and this Rule does not distinguish the type of document on the strength of which the CENVAT was taken. CENVAT credit availed on the strength of ISD invoices can also be recovered under Rule 14 of CCR and there is no provision under the CCR to issue a notice to or recover CENVAT credit from the ISD.

7. We have considered the submissions on this issue. Input Service Distributor is defined in Rule 2(m) of CCR as follows:

Rule 2 (m) ― input service distributor means an office of the manufacturer or producer of final products or provider of output service, which receives invoices issued under rule 4A of the Service Tax Rules, 1994 towards purchases of input services and issues invoice, bill or, as the case may be, challan for the purposes of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, or an outsourced manufacturing unit as the case may be; ISD are registered with the Service Tax and issue ISD invoices under Rule 4A (2) of Service Tax Rules, 1994 which reads as follows:

4A. Taxable service to be provided or credit to be distributed on invoice, bill or challan – (1) ..

(2) Every input service distributor distributing credit of taxable services shall, in respect of credit distributed, issue an invoice, a bill or, as the case may be, a challan signed by such person or a person authorized by him, for each of the recipient of the credit distributed, and such invoice, bill or, as the case may be, challan shall be serially numbered and shall contain the following namely:-

(i) the name, address and registration number of the person providing input services and the serial number and date of invoice, bill, or as the case may be, challan issued under sub-rule (1);

(ii) the name and address of the input service distributor;

(iii) the name and address of the recipient of the credit distributed;

(iv) the amount of the credit distributed

Provided that in case the input service distributor is an office of a banking company or a financial institution including a non-banking financial company providing service to any person an invoice, a bill or, as the case may be, challan shall include any document, by whatever name called, whether or not serially numbered but containing other information in such documents as required under this sub-rule:

8. CENVAT credit is the credit of excise duty paid on inputs or service tax paid on input services which can be used by the manufacturer assessee to pay the Central Excise duty on the goods manufactured by it. Thus, every rupee availed as CENVAT credit and utilized reduces the liability of the assessee to pay duty in cash by one rupee. Therefore, it is essential that CENVAT credit is taken as per the Rules. If CENVAT credit is irregularly availed, it can be recovered under Rule 14 of CCR and penalty can be imposed under Rule 15. While Rule 14 of CCR provides for recovery of irregularly availed CENVAT credit, it does not lay down a mechanism for such recovery but instead made the provisions of section 11A of the Central Excise Act, 1944 (which deals with recovery of duty) applicable mutatis mutandis. Rules 14 and 15 of CCR read as follows:

RULE 14. Recovery of CENVAT credit wrongly taken or erroneously refunded. — (1) (i) Where the CENVAT credit has been taken wrongly but not utilised, the same shall be recovered from the manufacturer or the provider of output service, as the case may be, and the provisions of section 11A of the Excise Act or section 73 of the Finance Act, 1994 (32 of 1994), as the case may be, shall apply mutatis mutandis for effecting such recoveries; (ii) Where the CENVAT credit has been taken and utilised wrongly or has been erroneously refunded, the same shall be recovered along with interest from the manufacturer or the provider of output service, as the case may be, and the provisions of sections 11A and 11AA of the Excise Act or sections 73 and 75 of the Finance Act, 1994, as the case may be, shall apply mutatis mutandis for effecting such recoveries.

RULE 15. Confiscation and penalty. — (1) If any person, takes or utilises CENVAT credit in respect of input or capital goods or input services, wrongly or in contravention of any of the provisions of these rules, then, all such goods shall be liable to confiscation and such person, shall be liable to a penalty in term of clause (a) or clause (b) of sub-section (1) of section 11AC of the Excise Act or sub-section (1) of section 76 of the Finance Act (32 of 1994), as the case may be.

9. We do not find any provision under which the ISD which does not avail or utilize the CENVAT credit but merely passes the credit through ISD invoices to its units can be issued a notice and any wrongly passed CENVAT credit can be recovered from it. On a specific query from the bench, learned counsel for the assessee agrees that there is no provision under which CENVAT credit wrongly passed can be recovered from the ISD.

10. Thus, we find that the CCR envisage recovery of irregularly availed CENVAT credit from the one who has so availed it under Rule 14 and they have no mechanism to recover CENVAT credit from the ISD who merely passes the CENVAT credit to its units. However, if the CENVAT credit is availed on the strength of an excise invoice issued by the manufacturer who supplied the inputs or a service tax invoice issued by the provider of input service, the assessment of the excise duty or the service tax in such invoices cannot be examined or opened by the officers dealing with the CENVAT credit of the recipient of the input or input service. The reason for this is self-evident. If the manufacturer pays excise duty or a service provider pays service tax incorrectly, the assessing officers in whose jurisdiction they fall have to decide the issue and the officer having jurisdiction of the buyer is not the assessing officer of the supplier of the goods or services. In MDS Switchgear relied upon by the learned counsel, the Department issued a SCN to the assessee seeking to change the assessable value and consequently, the duty of its supplier and thereby, restrict the MODVAT credit taken by the assessee. The demand was confirmed by the Commissioner but it was set aside by the Tribunal which decision was upheld by the Supreme Court. However, the ISD invoices stand on a different footing and no duty is assessed by the jurisdictional officer of ISD as it neither pays any excise duty or service tax nor does it avail and utilize the benefit of the CENVAT credit but merely passes the credit of service tax paid by the service providers to its units which avail CENVAT credit and use it. These units file returns which show, among other things, the CENVAT credit availed. The jurisdictional officers have to scrutinize and assess them and if any CENVAT credit is irregularly availed on the strength of invoices (including ISD invoices), it can be recovered under Rule 14 of CCR from them. The case laws relied upon by the learned counsel deal with situations where the jurisdictional officer of the assessee who used the CENVAT credit wanted to reassess the duty paid by the manufacturer of the goods.

11. For all the above reasons, we find that the SCN was issued correctly by the Commissioner and the impugned order was issued as per his jurisdiction. We answer the question of jurisdiction in favour of the Revenue.

Advertising services

12. Revenue‘s appeal is only against the Commissioner allowing service tax on advertising services to the appellant. It is not in dispute that the expenses were incurred on advertisement and that the ISD invoice was issued passing on the service tax paid on such service. It is also not in dispute that advertising services are specifically covered in the inclusion part of the definition of ‘input service‘ under Rule 2(l) of the CCR which, as applicable during the relevant period, read as follows:

“Rule 2 (l) ―input service‖ means any service, –

(i) used by a provider of [output service] for providing an output service; or

(ii)used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal;‖

13. Revenue‘s contention is that the expenses were incurred to advertise ‘Coromandel‘ brand cement which was not the brand owned by the appellant and that it was the brand name of M/s. India Cements Ltd., which, during the relevant period was the parent company of the appellant. Later, the appellant was merged with the India Cements with effect from 1.1.2014, the date of appointment. Therefore, at the time the services were availed, Coromandel brand did not belong to the appellant.

14. According to the Revenue, although the appointed date was 1.1.2014, the amalgamation was approved only on 20.4.2017 and therefore, on the day when the appellant took CENVAT credit it did not own the brand Coromandel cement and therefore, the advertisement expenses incurred on the advertisement of this brand do not qualify as ‘input service‘ and hence no CENVAT credit is admissible.

15. According to the learned counsel for the assessee, although Coromandel brand belonged to India Cement-its parent company, it was licenced to use this brand and accordingly it manufactured and sold cement under this brand and incurred the expenses on the advertisements. It is also the contention of the learned counsel that although the assessee merged with its parent company, India Cements by order dated 290.4.2017, it came into force from 1.1.2014, the appointed date and therefore, during the relevant period, the assessee should be treated as India Cements and therefore, Coromandel should be treated as its own brand.

16. We have considered the submissions on this issue. A plain reading of Rule 2(l) of CCR allows credit of advertising expenses and it does not place on any restrictions on what type of advertising qualifies for CENVAT credit. So long as the advertisement is for the excisable goods sold or the taxable services rendered, there can be no restriction on availing the CENVAT credit. In particular, there is no condition that the brand which has been advertised should have been owned by the assessee availing CENVAT credit. If company A manufactures goods under the brand name belonging to company B under licence, it is natural for A to advertise its goods with that brand name and such advertising expenses get squarely covered under Rule 2(l) of CCR. We, therefore, find that the assessee was entitled to CENVAT credit on advertising services and the Commissioner has correctly allowed CENVAT credit. Revenue‘s appeal deserves to be dismissed. The other submissions by both sides regarding the date of amalgamation of the assessee with M/s. India Cements are irrelevant as we find that there is no requirement that the brand name under which the goods have been advertised must belong to the assessee.

CENVAT Credit on other services

17. We now proceed to examine the CENVAT credit denied by the Commissioner on the four other services which form the subject matter of appeal E/52298/2019 filed by the assessee, M/s. India Cements (formerly known as Trinetra Cements).

Business Auxiliary Services and Services of hotels and restaurants

18. Learned counsel submits that an amount of Rs. 31,96,936/-availed by the appellant on the restaurant and hotel services was denied to it as Business Auxiliary services. The appellant claimed only Rs. 1,21,478/- towards restaurant and hotel charges and claimed Rs. 31,96,936/- for different services. The restaurant and hotel services were availed by its marketing staff to explore new markets and encourage sales. Therefore, they fall squarely within the definition of the input service and CENVAT credit. CENVAT credit of Rs. 31,96,936/- was claimed on services which were incentives provided to the employees of the appellant which could lead to boost in sales and therefore, fall within the ambit of ‗sales promotion‘. Therefore, credit on these services also needs to be allowed. He relied on the following decisions to support his claim for credit of hotel and restaurant services:

i) Six Sigma Certification Pvt. Ltd. versus Commissioner⁸

ii) Reddy’s Laboratories Ltd. versus Commissioner⁹

19. Learned authorised representative for the Revenue supports the impugned order and reiterates its findings. We find that the learned commissioner has recorded his findings on this issue in paragraph 45.1 of the impugned order. He affirmed the demand and held that the entire amount of CENVAT credit was mentioned in the SCN as Business Auxiliary Services and therefore, the appellant‘s contention that it was only for restaurant or hotel services is not correct.

20. A perusal of the impugned order shows that this contention of the learned counsel made before the Commissioner was examined by him in paragraph 45.1 of the order. The relevant portion of this order reads as follows:

“..I find that in the Show cause notice cenvat credit of Rs. 31,96,936/- is shown in the head of Business Auxiliary Services(Restaurant/Hotel services). The assessee has submitted two Annexures- one for credit of Rs. 1,21,488/-and another for credit of Rs. 31,96,936/- containing invoice wise details and credit availed thereon. In both the annexures, service category is mentioned as ‗BAS‘. In the show cause notice also Cenvat credit of Rs.31,96,936/- is shown in the head of Business Auxiliary services (Restaurant/Hotel services), therefore, assessee‘s argument that in SCN amount is only show in Restaurant/Hotel services is not correct.

On perusal and scrutiny of the charts, I find that the notice has availed credit of Rs. 31,96,936/- (service tax of Rs. 3113746 + Rs. 83,190/- KKC) on 256 invoices. The chart does not contain details of services availed by the assessee and I have therefore gone through the invoices submitted by them. I observe that invoices contain a varied and very sketchy description of the services availed by the assessee viz.,

(1) Administrative expenses/ Fix Administrative cost/MO expenses (month wise)

(2) Travelling expenses for Gold distribution functions/Gold melas expenses

(3) Transportation/hire charges paid to taxi Quarterly maintenance charges for office of ISD

(4) Food expenses for Bus drivers and cleaners of various buses during annual gold function

(5) Four wheeler hire expenses/transportation charges

(6) Courier charges

(7) Surat office renovation

(8) Movie ticket expenses along with snacks

(9) Navratri Garba entry passes

(10) Food bills

(11) Pen and chocolate expenses for wishing marriage anniversary

(12) Family get together expenses

(13) Padyatri biscuit distribution expenses

(14) Plant visit charges

(15) Water park charges

(16) Hotel/banquet charges inclusive of room service charges, etc.

I observe that out of total input service credit of Rs. 31,96,936/- majority credit of Rs. 16, 91, 423/- pertains to the invoices related to gold distribution expenses and about R.s 5,87,289/- for monthly fixed administrative expenses, fix administrative cost/MO expenses. However, correct amount could not be ascertained as some invoices were not provided by the assessee. Further, I observe that Gold distribution expenses are basically transportation charges for taxis taken on hire which is clearly not eligible for credit in view of exclusion provided in clause (B) in definition of input services viz.,

(B) services provided by way of renting of a motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods; or

The assessee has not explained in their submissions as to what they mean by administrative expenses/fix administrative cost and what type of expenses/services were provided to them and how these services have any nexus with the manufacturing activity. Further, renovation charges of office are also not allowed as admissible credit in view of exclusion provided in clause (A) in the definition of input services, viz.,

(A) Service portion in the execution of a works contract and 

construction services…..

…..

I, therefore hold that the aforesaid expenses incurred by them are not covered in the definition of input services as the same were not used directly or indirectly, in or in relation to the manufacture of the final products and clearance of final products up to the place of removal and therefore I disallow the cenvat credit of Rs. 31,96,936/- availed by the assessee for miscellaneous services claimed by them under the Business Auxiliary Services.

21. We have considered the submissions of the learned counsel for the appellant and the detailed reasoning for denial of credit given by the adjudicating authority. CENVAT credit has to be allowed only if the excise duty paid on the inputs and service tax paid on the input services used in or in relation to the manufacture of the final products. The law does not permit CENVAT credit of any service tax paid on any bill for any service availed in the course of business. If such was the intention of the law, there would have been no need to restrict credit to ‘inputs‘ and ‘input services‘ and further clearly defining these two terms. The term ‘input service‘ has a means clause and an inclusion clause which further enlarges the scope of the term and an exclusion clause which reduces its scope. Any services availed on vehicles and service tax paid on service component of any works contract for construction of a building are clearly excluded from the scope of ‘input services‘. Therefore, even if such services fall in the means portion of the definition of ‘input services‘, they do get excluded by the exclusion clause of the definition.

22. Since the appellant is claiming the benefit of CENVAT credit, it is for the appellant to show how the services fall within the definition of ‘input service‘. The submission of the learned counsel for the appellant is that all these programmes from gold distribution melas to marriage anniversary and food bills should be treated as expenses towards business promotion. We do not agree. Every expense which any business incurs will have some bearing or relationship with its business and if the intention of the CENVAT credit Rules is to allow CENVAT credit on every bill, they would have said so. Instead, credit is confined to duty paid on inputs and service tax paid on input services and a detailed definition of ‘input services is provided‘. We are not convinced that celebrating marriage anniversaries, family visits, melas, and buying chocolates and pens, etc. fall within the definition of the ‘input services‘ of the appellant. We agree with the detailed reasoning given by the Commissioner in the impugned order for denying CENVAT credit of Rs. 31,96,936/- on business auxiliary services.

Event management services

23. Learned counsel for the appellant submits that the Event Management services were availed in relation to events such as annual award and other functions organized for its dealers based on their sales performance. Such awards, incentivize and improve sales performance. Learned Commissioner rejected the claim on the ground that the invoices do not mention any event and this was because the event manager does not give the details of the event and therefore, the claim of the appellant cannot be rejected on this ground. He relies on the following decisions:

i) Axis Bank vs Commissioner¹⁰

ii) Commissioner vs. Samsung India Electronic Pvt. Ltd.¹¹

iii) Ocean connect India Pvt. Ltd. vs Commissioner¹²

24. Learned authorised representative for the Revenue supports the impugned order and reiterates its findings.

25. We find that that these services were availed, as recorded in the impugned order, to arrange annual award and other functions/ programmes for the dealers. However, the Commissioner denied CENVAT credit that the invoices did not mention what event was being organized.

26. When one hires a service provider, he may not always indicate in detail the programme which is being organized. Instead, he indicates the services which he provided and the name of the client. In our considered view, the services rendered towards the annual awards or other programmes for the dealers have a direct nexus to sales promotion and CENVAT credit is admissible on such services. Accordingly, we allow CENVAT credit of Rs. 34,800/- availed by the appellant on these services.

Mandap keeper services

27. Learned counsel for the appellant submits that the CENVAT credit on mandap keeper services was availed for the hotels and restaurant services for the functions and programmes held for dealers and customers and hence they fall under the definition of ‘sales promotion‘ and ‘market research‘. Therefore, credit should be allowed. The Commissioner wrongly denied the CENVAT credit on the ground that one of the bills under this head is for food charges for 11 persons and it is not clear whether any business meet was held or not.

28. Learned authorised representative for the Revenue supports the impugned order and reiterates its findings.

29. We find that the Commissioner observed that he had examined the invoice issued by M/s. Madhuban Resorts & Spa and it was not for Mandap keeper services but was actually food charges for 1100 persons @ Rs. 840 per person and that it is not clear whether any business meet was organized or it was for a personal function. Accordingly, he disallowed the credit.

30. We find that if the invoice was issued to the appellant and it was for food for 1100 persons and the appellant claims that it was for their business function, there is no reason to doubt and say that it was for a private function in the absence of any evidence that the invoice meant for a personal function was shown as an invoice for official meeting and billed to the appellant. We, therefore, hold that the appellant was entitled to CENVAT credit of this amount.

Tour operator Services

31. Learned counsel submits that the appellant claimed CENVAT credit for tour operator services availed by it for travel of dealers for better sales which was wrongly denied by the Commissioner holding that exception clause C of the definition of ‘input service‘ applies to this case, i.e., services primarily used for personal use or consumption of any employee. The tours were organized for dealers and not for employees and hence the appellant is entitled to CENVAT credit.

32. The Commissioner observed in the impugned order that the invoice was issued by Zenith Leisure Holidays which was a package tour for a number of persons and that other relevant invoices were not produced before him. On the basis of the details mentioned in the invoice, he observed that the expenses appear to have been incurred by the appellant on tour operator services for personal consumption of their employees and dealers and are specifically excluded by clause (D) of the definition of ‘input services‘ according to which ‘travel benefits extended to employees on vacation such as leave or home travel concession, when such services are primarily used for personal use or consumption of any employee are not admissible.

33. Learned authorised representative for the Revenue supports the impugned order and reiterates its findings.

34. Given the nature of the invoice in question, it does appear to be an invoice for holiday of a large number of persons. We do not find anything to show that this expense was on account of any business trip. In view of the specific exclusion of the services meant for personal consumption or use of any employee in the definition of ‗input service‘, we find that no CENVAT credit will be admissible on this account.

35. In view of the above, Revenue‘s appeal E/51610/2019 is dismissed. Assessee‘s appeal E/52298/2019 is partly allowed to the extent of allowing CENVAT credit on Event Management services and Mandap Keeper Services and the impugned order stands modified to this extent. Rest of the impugned order is upheld.

(Order pronounced in Court on 18/04/2023.)

Note:-

1. Assessee

2. Impugned order

3. SCN

4. CCR

5. ISD

6. 2008(229) ELT 485 (SC)

7. 2009(239) ELT 322 (Tri-Ahmd)

8. 2018 SCC Online CESTAT 1145

9. 2016 SCC Online CESTAT 4020

10. 2017 SCC Online CESTAT 20474

11. 2015 SCC Online 3617

12. 2016 SCC Online CESTAT 7379