By TIOL News Service

MUMBAI, MAY 31, 2017: REVENUE is in appeal when the appeal was posted for hearing, the AR sought from the Bench more time to prepare the arguments on the ground that the case file had been had been handed to him only a day before.

The Bench did not find this a good reason to grant adjournment and, therefore, did not accede to the request.

The respondent assessee had claimed CENVAT Credit on the following services viz. Rent-a-Cab service, Outdoor catering service,Event Management services,Architect Services,Warehousing charges, Cargo handling services and Staff picnic.

The plea of the assessee and the observations of the Bench on the admissibility or otherwise of CENVAT credit on the various services are summed up as below –

+ Rent-a-cab Service: Cars were hired for the purpose of transportation of the employees to the place of work, which is integrally connected with output services provided since the appellant is engaged in provision of BPO services for the Citibank. Therefore, it may not be unreasonable to allow the CENVAT Credit on this count.[Circular No. 120/01/2010-ST dated 19.1.2010 relied upon]

+ Outdoor catering services: This service is also covered by the Circular in para 3.1.1 thereof. Therefore, there is no disagreement to the mandate of Circular. Accordingly, the appellant succeeds on this count also.

+ Event Management service: Appellant submission is that event management was must to motivate the employees and boost their morale; that these services are availed in relation to the business which helps employees in improving interpersonal skills, rejuvenate, increase efficiency and to improve their performance in the business.

However, integral connection of such services with output services is failed to be established . When nexus of input service with output service is not proved, then there should not be grant of relief at the interest of justice. Accordingly, the appellant loses on this count, for which appeal on such count is dismissed.

+ Warehousing services: The appellant brings out that it is responsible to store vehicles taken possession from customers.

This has no nexus to the provision of service, for which there shall be disallowance of the CENVAT Credit.

+ Architect's services (Rainwater harvesting):Appellant says that this service was used in construction of the tank to be used for rainwater harve sting as mandated by BMC Regulations.

It is agreed that the object of the statute should not be frustrated by not allowing the CENVAT Credit. Therefore, the appellant gets relief on this count also.

+ Staff relocation/Cargo Handling: Appellant says that this service is to make relocation of employees from one location to other.

We do not find any integral connection of this service to output service. Therefore, the appellant loses on this count.

+ Staff picnic: There is no reasoning to allow credit in absence of integral connection to the output services.

The appeal was partly allowed as above.

(See 2017-TIOL-1811-CESTAT-MUM)