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2021 (9) TMI 536 - AT - Service TaxCENVAT Credit - input services - brokerage - custodial charge - event management and consortium charges - invoices in rule 4A of Service Tax Rules, 1994 and in rule 9 of CENVAT Credit Rules, 2004 - denial of credit for incomplete documentation - HELD THAT:- It is settled law that procedural infirmities cannot stand in the way of availment of substantive benefit. It is not the case of the tax authorities that the services of State Bank of India had not been deployed in the consortium led by them or that tax liability had not been included in the consideration made over to the provider of service. It is also not the case of the service tax authorities that the provider of service is not in the business of banking and other financial service; nor is it the contention that the output service afforded by the consortium, which included the appellant, is not taxable - The denial of credit merely for want of description of service or classification thereof, which are primarily intended for statistical reference, should not be allowed to impede availment of credit as substantive eligibility, prescribed in CENVAT Credit Rules, 2004 is not assailed by Revenue. Event management service - connection with output service of organisations - HELD THAT:- The issue has been settled by the decision of the Tribunal in ENDURANCE TECHNOLOGIES PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, AURANGABAD [2013 (8) TMI 601 - CESTAT MUMBAI] where it was held that credit cannot be denied in similar issue - thus, the denial of this credit is not in accordance with established law. The reliance placed upon the decision of the Hon’ble High Court of Rajasthan in BANSAL CLASSES VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX [2015 (4) TMI 288 - RAJASTHAN HIGH COURT] would not apply to the facts of the present dispute inasmuch as the activities therein, concerned with programmes after the culmination of taxable service against which credit was claimed, were not attributable to the rendering of the output service thereby emphasizing that each situation should be evaluated on its own facts. CENVAT Credit - credit of taxes included in the consideration for availing ‘brokerage charges’ and ‘custodial charges’ upon buying and selling of ‘securities’ for compliance with the ratios prescribed for banks in the monetary policy of Reserve Bank of India - HELD THAT:- The denial of credit of these taxes in the impugned order stems from the finding that, unlike the purchase and sale of securities for, and on behalf of, their customers, the beneficiary of the impugned activity being themselves takes it out of the purview of taxable service in which a provider and a recipient are pre-requisites. In effect, the premise is that the appellant, even if a registered provider of taxable service, is, nonetheless, a final consumer of the service. The exempted service is defined in CENVAT Credit Rules, 2004 and neither of the legs – the principal meaning and the inclusive meaning in the absence of a service rendered by the appellant that is not subject to tax – appear to fit the circumstances of procurement of brokerage and custodial services in the dispute before us. The existence of such service is but speculation without the presence of an identifiable recipient and flow of consideration; else, every consumed service could meet the same fate in the mind of the tax collector - the appellant, as a bank is required, under the regulatory aegis of the Reserve Bank of India, to comply with the cash reserve ratio (CRR) and statutory liquid ration (SLR) for participation in restricting money supply or expanding money supply according to the monetary policy of the country and has thus, undertaken activity which cannot be disaggregated from rendering banking and financial service’to its customers - denial of credit to banks in such circumstances is, therefore, not sanctioned by CENVAT Credit Rules, 2004. Appeal allowed - decided in favor of appellant.
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