2021 (9) TMI 414 - AT - Central Excise

CENVAT Credit - input service - event management service - Skill Competition between dealers and employees - other business events services. - denial on the ground that the same does not cover under Rule 2(l) of the Cenvat Credit Rules, 2004 as input service - period June 2012 to June 2017. Skill Competition between dealers and employees - HELD THAT - The said competition is an event which shows the sale skill of the employees as well as the dealers. The skills of the employees shows that how they participate in bringing more production of the product and the skills of the dealers shows that how they increased the sale of the product - the said service is an integral part of manufacturing as well as sale activity, which is conducted by the appellant - the said service do qualify as input service in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 - the appellant is entitled to cenvat credit for the said service. Other business events services - HELD THAT - Vishwakarma Puja and inauguration of new pipe line are basically two others business events services for which cenvat credit was sought to be denied. In fact, Vishwakarma Puja is a big festival for the workers who work on machines and they pray to the God for good running of their machines by doing Vishwakarma Puja - these two pujas are also integral part of manufacturing activity. Therefore, for these services also, the appellant is entitled for cenvat credit. The appellant has rightly taken the cenvat credit - Appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of cenvat credit on event management services under Rule 2(l) of the Cenvat Credit Rules, 2004 for the period June 2012 to June 2017.

In this case, the appellant, a manufacturer of motor vehicles and parts, appealed against the denial of cenvat credit on event management services for the period June 2012 to June 2017. The dispute revolved around two types of event management services: Skill Competition between dealers and employees, and other business events services like Vishwakarma Puja and inauguration of production lines. The appellant argued that these events were directly or indirectly related to sales promotion and manufacturing activities, making them eligible for cenvat credit. The appellant contended that the Skill Competition motivated dealers and employees to promote sales, while the Vishwakarma Puja and inauguration events were essential for the workers' productivity and the manufacturing process. The Authorized Representative reiterated the findings of the impugned order denying cenvat credit for these services.

Upon considering the submissions, the Tribunal found that the denial of cenvat credit was limited to the two types of services: Skill Competition between dealers and employees, and other business events services. Regarding the Skill Competition, the Tribunal determined that it was integral to both manufacturing and sales activities, as it showcased the skills of employees and dealers in increasing production and sales. Therefore, the Tribunal held that this service qualified as an input service under Rule 2(l) of the Cenvat Credit Rules, 2004, entitling the appellant to cenvat credit. Concerning the other business events services, specifically Vishwakarma Puja and inauguration of new production lines, the Tribunal recognized them as significant for worker motivation and the smooth running of manufacturing processes. Consequently, the Tribunal concluded that these events were also integral to the manufacturing activity, allowing the appellant to claim cenvat credit for these services.

In light of the above analysis, the Tribunal ruled in favor of the appellant, overturning the denial of cenvat credit on the event management services in question. The impugned order was set aside, and the appellant was granted consequential relief.