Cenvat credit on business magazine subscriptions and hotel accommodation upheld where the expenses supported business use.

Service tax paid on magazine subscriptions used for business promotion was held admissible as Cenvat credit because the journals and magazines supported the assessee's business activity and were not shown to be outside the credit scheme. Service tax paid on hotel accommodation used for business travel was also held admissible, as no material showed that the expense was personal or otherwise excluded. The denial of credit on both items was set aside, and the appeal succeeded.

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Issues: (i) whether service tax paid on subscription to magazines of various associations was admissible as Cenvat credit; (ii) whether service tax paid on hotel accommodation used for business purposes was admissible as Cenvat credit.

Issue (i): whether service tax paid on subscription to magazines of various associations was admissible as Cenvat credit.

Analysis: Subscription to journals and magazines of associations in which the appellant was a member was treated as a business input used for promotion and carrying on the business. The expense was therefore connected with business activity and not a disallowed association subscription in the sense suggested by the Revenue.

Conclusion: Cenvat credit of the service tax paid on magazine subscription was admissible and the denial was unsustainable.

Issue (ii): whether service tax paid on hotel accommodation used for business purposes was admissible as Cenvat credit.

Analysis: No material was produced to show that the hotel accommodation expense was of a personal nature or otherwise fell within any exclusion. In the absence of evidence showing ineligibility, the service was treated as connected with business use.

Conclusion: Cenvat credit of the service tax paid on hotel accommodation was admissible and the denial was unsustainable.

Final Conclusion: The appeal succeeded, and the denial of Cenvat credit on both items was set aside.

Ratio Decidendi: Service tax paid on services used for business promotion or business travel is admissible as Cenvat credit unless the Revenue establishes that the expenditure is personal or otherwise excluded.

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