AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (7) TMI 771
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....x paid on input services used in or in relation to the manufacture of their final products. In the course of audit of their records in November, 2007, it was noticed that the appellants during the period 2005-2006 and 2006-2007 had availed Cenvat credit of Service tax paid on the Event Management Services utilized for organizing annual functions for the employees. The department was of the view that the Event Management Services availed for organizing functions for the staff have no nexus with the manufacture of the final products and are not covered by the definition of "input service" and the appellant were, therefore, not eligible for the Cenvat credit of Service tax paid on this service. It is on this basis that the show cause notice da....
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....msp;Shri Ravi Raghavan, Advocate, ld. Counsel for the appellant, pleaded that the disputed amount of Cenvat credit pertains to Event Management Services availed for celebration of Annual Day functions, that celebration of Annual Day in which all the employees participate along with their family members is an activity related to business, as in course of such functions, the employees of different departments get an opportunity to meet each other, which results in better productivity, that the Event Management Service for organizing Annual Day functions is, therefore, covered by the definition of 'input service' as the same has nexus with the manufacture of final products, that Manchester VAT Tribunal in case of KPMG Peat Marwick McLintock v.....
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....dit demand, interest and penalty may be waived for hearing of the appeal. 6. Mrs. Monika Batra, ld. Departmental Representative, opposing the appellant's plea for waiver from the requirement of pre-deposit pleaded that the service in question, being in respect of Event Management Services had been availed in course of Annual Day Function for the employees, that organizing Annual Day Function for the employees has no nexus with the manufacture of the final products, that the Hon'ble Bombay High Court in the case of CCE, Nagpur v. Manikgarh Cement reported in 2010 (20) S.T.R. 456 (Bombay) has held that services of repair and maintenance and civil construction used in the residential colony of the respondent may be welfare activities but....
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....r the manufacture of final products and if the activities not integrally connected with the business of manufacture of final products, the services would not qualify to be input services, that looked at from this criteria, the Event Management Service availed for organizing Annual Function being the activities in relation to the welfare activities cannot be treated as the activities integrally connected with the business and hence, the Cenvat credit in respect of the same was not available, that during the period of dispute, the appellant in ER-1 Return had not disclosed that the credit, in question, availed by them was in respect of Event Management Service used in connection with organizing of the Annual Day Functions for the employees an....
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....nected with the business of manufacture of final products would not qualify to be input services under Rule 2(l) of Cenvat Credit Rules, 2004. The question as to whether the activities of employee welfare can be said to have nexus with the business of manufacture of final products has been answered in negative by the Hon'ble Bombay High Court in the case of CCE, Nagpur v. Manikgarh Cement (supra). In view of this, we are of the prima facie view that the appellant would not be eligible for Cenvat credit of Service tax paid on Event Management Services used for organizing annual day functions for the employees. As regards the question of time bar, while the appellant's plea is that the fact that the Cenvat credit, in question, was in respect ....