Input service credit eligibility narrowed on excluded welfare and residential security services, while notice-based denial was set aside.

Cenvat credit under the input service definition was allowed for event management, credit card charges, vehicle repair and maintenance, miscellaneous services, mediclaim insurance for employees and dependents, club membership used for business purposes, and survey for purchase of land, applying the statutory definition and prior authority. Credit was denied for security at the residence of the CMD/JMD and for outdoor catering after 01.04.2011 in view of the post-amendment position and the Larger Bench ruling relied upon. A denial of credit on execution of work at the factory was also set aside because that ground was not specifically proposed in the show cause notice or recorded in the original order.

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Issues: (i) Whether cenvat credit on various services used by the assessee, including event management, credit card charges, repair and maintenance of vehicles, miscellaneous services, mediclaim insurance, club membership, survey for purchase of land, security at residence of CMD/JMD, and outdoor catering, was admissible as input service credit; (ii) Whether denial of credit on the service described as execution of work at the factory was sustainable when the show cause notice and the original order did not specifically propose or record such denial.

Issue (i): Whether cenvat credit on various services used by the assessee, including event management, credit card charges, repair and maintenance of vehicles, miscellaneous services, mediclaim insurance, club membership, survey for purchase of land, security at residence of CMD/JMD, and outdoor catering, was admissible as input service credit.

Analysis: The credit on event management, credit card charges for the managing director, repair and maintenance of vehicles, and miscellaneous services was followed from the assessee's own earlier decision. Mediclaim insurance for employees and dependents, club membership used for business purposes, and survey for purchase of land were treated as falling within the scope of input service on the basis of the authorities relied upon. Security at the residence of CMD/JMD was held not to satisfy the definition of input service. Outdoor catering for the period after 01.04.2011 was denied in view of the post-amendment position and the Larger Bench ruling relied upon.

Conclusion: Credit was allowed for event management, credit card charges, repair and maintenance, miscellaneous services, mediclaim insurance, club membership, and survey for purchase of land, but was rejected for security at the residence of CMD/JMD and for outdoor catering after 01.04.2011.

Issue (ii): Whether denial of credit on the service described as execution of work at the factory was sustainable when the show cause notice and the original order did not specifically propose or record such denial.

Analysis: The service was found to have been included only in the computation of the demand, without any specific allegation in the show cause notice and without any finding in the original order. A denial introduced for the first time at the appellate stage was held to travel beyond the notice and the original adjudication.

Conclusion: The denial of credit on execution of work at the factory was set aside as unsustainable.

Final Conclusion: The appeal succeeded in part, with credit allowed on several disputed services and denied only on the specified excluded services.

Ratio Decidendi: Credit eligibility under the input service definition must be determined on the basis of the statutory definition, binding precedent, and the scope of the show cause notice, and a demand cannot be sustained on a ground not specifically alleged or adjudicated in the original proceedings.

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