2009 (7) TMI 196 - AT - Service Tax

Appeal granted for input service credit on management consultant services related to logistic activities.

The Tribunal allowed the appeal, setting aside the impugned order that denied input service credit for management consultant service related to logistic ... Input service credit availed in respect of management consultant service stands denied to the appellant on the ground that the same was in respect of logistic activities relatable to removal of the finished goods and as such cannot be said to be covered under the definition of input service - I find as held by the Tribunal in the case of ABB Ltd. Versus CCE & Service Tax [ 2009 - TMI - 34139 - CESTAT, BANGALORE], the definition of input service includes any services relatable to any “activities relationg to business”. In as much as the removal of the goods is also a part of the activity relating to business, the services obtained in relation to the same would get covered by the above expression and consequently by the definition of ‘input service’. In view of the above, I set aside the impugned order and allow the appeal – credit is available Issues: Denial of input service credit for management consultant service in relation to logistic activities for removal of goods. Challenge on the point of limitation.Issue 1: Denial of input service credit for management consultant service in relation to logistic activities for removal of goods.The appellant's input service credit for management consultant service was denied on the grounds that it was related to logistic activities for removal of finished goods, which allegedly did not fall under the definition of input service. The appellant argued that the service also involved the movement of raw materials and goods within the factory premises, and even if it was used for removal of final products, it should still be considered an input service. The appellant relied on the Tribunal's Larger Bench decision in the case of ABB Ltd., which held that activities relating to business, including outward transportation of goods, constitute input service. Additionally, the appellant cited another Larger Bench decision in the case of Commissioner of CE., Mumbai v. GTC Industries Ltd., where outdoor catering service in the manufacturer's canteen was deemed an input service for Modvat credit. The Tribunal, after considering both sides' submissions, concluded that since the removal of goods is part of the business activity, services obtained in relation to it should be covered under the definition of input service. Consequently, the impugned order was set aside, and the appeal was allowed with relief to the appellant.Issue 2: Challenge on the point of limitation.The order was also challenged on the point of limitation. However, the judgment did not provide detailed analysis or discussion regarding this challenge. The Tribunal's decision primarily focused on the denial of input service credit for management consultant service in relation to logistic activities for the removal of goods. The Tribunal did not find it necessary to delve into the challenge on the point of limitation further, as the decision on the main issue resolved the appeal in favor of the appellant. Therefore, the challenge on the point of limitation did not impact the final outcome of the case, and the appeal was disposed of based on the resolution of the primary issue regarding input service credit.In conclusion, the Tribunal's judgment in this case addressed the denial of input service credit for management consultant service in relation to logistic activities for the removal of goods. The decision was based on the interpretation of the definition of input service and relevant precedents set by the Tribunal's Larger Bench decisions. The challenge on the point of limitation did not significantly impact the final outcome of the case, as the resolution of the main issue led to the setting aside of the impugned order and the allowance of the appeal with relief to the appellant.