Input service credit denied for employee celebration event, as no evidence showed business use or business-linked purpose.

Event Management service used for an employee celebration connected with plant expansion was not treated as an input service under the Cenvat Credit Rules, 2004 because the assessee failed to show, with supporting evidence, that the service was used for business purposes. Although the input service definition extends to activities relating to business, the material produced did not establish advertisement, sales promotion, or any other business-linked activity. The expenditure was characterised as entertainment of employees rather than a qualifying business input, so Cenvat credit was held inadmissible.

---

---

Issues: Whether credit of service tax paid on Event Management service used for celebration of expansion of the plant was admissible as an input service under the Cenvat Credit Rules, 2004.

Analysis: The credit was claimed on Event Management service used for an employee celebration connected with expansion of the plant. The definition of input service extends to activities relating to business, but the assessee must establish by evidence that the service was rendered for business purposes. The materials relied upon by the assessee under income-tax law concerned ceremonies and publicity expenditures shown to be business-related on their facts, whereas in the present case no profile or supporting evidence was produced to show that the event was organized for advertisement, sales promotion, or any other business activity. The service was found to be for entertainment of employees, not a business-linked input service.

Conclusion: The service did not qualify as an input service and the Cenvat credit was not admissible, against the assessee.

---