2015 (11) TMI 903 - AT - Service Tax

Tribunal allows CENVAT Credit for Air Travel Agent, denies for security services

The Tribunal dismissed the Revenue's appeal, allowing CENVAT Credit for the Air Travel Agent service and disallowing it for security services at the ... CENVAT Credit - input services - Air Travel Agent - revenue contended that invoice raised by the service provider pertain to tickets issued in the name of personnel of the assessee - Held that:- In view of the nature of the business of the assessee being mainly works contract, wherein the works are situated at different places, the personnel of the assessee are required to travel for business purposes between various works site from Head Office to work site and from work site to Head Office and also have various other means including resolution of dispute tax balance etc. The adjudicating authority has erred in holding that although the bills are raised in the name of the company, the traveling tickets are in the name of the personnel as the company being an artificial judicial person, cannot travel itself as it exists only on paper in the eyes of law. It is only the personnel of the company, who travel for the business of the company and the CENVAT Credit in respect of Air Travel Agent service is rightly allowed by the impugned order - Decided in favour of assessee. Issues:1. Allowance of CENVAT Credit for input services Air Travel Agent2. Disallowance of CENVAT Credit for security services at residential premisesIssue 1 - Allowance of CENVAT Credit for input services Air Travel Agent:The case involved an appeal by the Revenue against the Commissioner (Appeals) order allowing CENVAT Credit for input services Air Travel Agent, which was initially disallowed. The Revenue argued that the service provider's invoice pertained to tickets issued in the name of the personnel of the assessee, not the assessee itself, thus disqualifying it as an input service under Rule 2(l) of Cenvat Credit Rules, 2004. The Commissioner (Appeals) relied on a ruling by the Hon'ble Bombay High Court in a similar case involving Coca Cola India Pvt. Ltd., where the court held that the connection between the service and the business activity was crucial for availing CENVAT Credit. The Tribunal found that the personnel of the assessee traveled for business purposes related to the company's activities, and the CENVAT Credit for Air Travel Agent service was rightfully allowed.Issue 2 - Disallowance of CENVAT Credit for security services at residential premises:Regarding the disallowance of CENVAT Credit for security services at residential premises, the Revenue contended that the security services were provided outside the registered premises, making the credit inadmissible. However, the respondent argued that the administrative office where the security services were provided was already included in the registration certificate, and any delay in updating the certificate was a procedural lapse. The Commissioner (Appeals) partially allowed the credit for Air Travel Agent service but disallowed it for security services at the Civil Line premises. The Tribunal upheld the Commissioner's decision, stating that the security services were related to the business activities of the assessee and were integral to the business, thus justifying the allowance of CENVAT Credit for the security services.In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the allowance of CENVAT Credit for the Air Travel Agent service and upholding the disallowance of credit for security services at the residential premises. The decision was based on the integral connection between the services and the business activities of the assessee, as established through relevant legal precedents and the specific circumstances of the case.