TMI Blog2021 (9) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... bility, 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ane-II confirming the said demands, along with interest thereon, under rule 14 of CENVAT Credit Rules, 2004 besides imposing penalty of like amount under rule 15 of CENVAT Credit Rules, 2004 and is under challenge before us. 2. Learned Chartered Accountant appearing for appellant intimates that of the demand pertaining to several services covered in the impugned order, denial of credit of tax paid by them on procurement of brokerage , custodial charge , event management and consortium charges are disputed. Narrating the backdrop to fastening of tax liability of ₹ 1,85,23,176 and ₹47,25,501 respectively. on brokerage and custodial charge , he contends that these pertain to securities that are required to be invested in, pursuant to the mandate of the monetary policy of the Reserve Bank of India, announced from time to time, and which may be deviated from only at the peril of forfeiting their banking licence. It was contended this regulatory compulsion has the effect of erasing the element of choice , implicit in service , from the transaction as laid down by the Hon ble High Court of Karnataka in Commissioner of Central Excise Service Tax, LTU, Bangalore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifically provides that the manufacturer of final products shall be allowed to take credit. The service tax is leviable under Section 66 of the Finance Act and paid on any input service received by the manufacturer of a final product. Therefore under the scheme of the Cenvat Credit Rules, 2004, the service tax paid on all those services which the assessee has utilized directly or indirectly in or in relation to the final product is entitled to claim the credit. Therefore, the Judgment of the Tribunal is legal and valid and is in accordance with law and does not suffer from any legal infirmity which calls for any interference. 3. It was also pointed out that a Larger Bench of the Tribunal in South Indian Bank v. Commissioner of Customs, Central Excise and Service Tax, Calicut [2020 (6) TMI 278 CESTAT Bangalore] was of the view that if the existence of the business itself was contingent upon procurement of a taxable service , its essentiality for rendering output service cannot be called into question and held that 43. The contention advanced on behalf of the banks is that the insurance service rendered by the Deposit Insurance Corporation to the banks is covered under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was contended that the policies did not come within the term property but in my opinion, they may be considered as acquired by purchase during his life. They are contracts by which the policy holder has a right to recover certain sums of money from the insurance office in certain events, and the premium which he pays may be considered as an investment so as to obtain for him a benefit of the policy holder. Life policies are now construed not as contracts of indemnity but to pay a certain sum in a certain event depending on the duration of human life. The judgment of the Hon ble High Court of Bombay in the case of Insure Policy Pius Services Pvt. Limited was affirmed by Apex Court as reported at 2016 (2) SCC 507. In our view, the judgments and the ratio thereto clearly supports the contention of the appellant that life insurance policy/the right to receive insurance policy money is an actionable claim. The exercise of the right to receive insurance money by the insured is an activity which is a transaction in actionable claim and is outside the scope of the definition of service. In our view, the amounts entered as surrender/discontinuance charges in the appellant asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004. He further contends that there is no allegation that tax was not paid on input services provided by State Bank of India, the lead bank in the consortium for providing loans to priority sectors, or that output service obtained by beneficiaries in the priority sector was ineligible. 8. Learned Authorised Representative, in connection with the denial of CENVAT credit on brokerage and custodial charge , submitted that the activity for which these services were procured does not result in output service within the meaning of CENVAT Credit Rules, 2004. According to him, the same activity for the benefit of other recipients of service would lie within the meaning of banking and other financial services whereas the impugned activity is nothing but trading in securities which is exempt and, therefore, not eligible for availing the tax paid as credit. For this, he placed reliance on rule 6 of CENVAT Credit Rules, 2004 and the non- taxability arising from the deeming of securities as goods for tax purposes. As far as the disallowance of credit on procurement of event management service is concerned, he contends that the activity has nothing to do with rendering of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (18) STR 33 (Tri.-Del.)] on the requirement of nexus insofar as availment of credit on event management service is concerned. The observation of the Larger Bench of the Tribunal in Wipro Ltd v. Commissioner of Central Excise, Bangalore III [2018 (363) ELT 1111 (Tri.-LB)], on the relevance of the exclusion clause in the definition of input service , and the decision of the Hon ble High Court of Bombay in Commission of Central Excise, Nagpur v. Manikgarh Cement [2010 (20) STR 456 (Bom.)]were also referred to. 10. Taking up the issue of denial of CENVAT credit for incomplete documentation, it is settled law that procedural infirmities cannot stand in the way of availment of substantive benefit. In Sambhaji and Others v. Gangabai and Others [(2008) 17 SCC 117], the Hon ble Supreme Court asserted that 12. Processual law is not to be a tyrant but a servant, not an obstruction but an aid to justice. A Procedural prescription is the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice. and in Mangalore Chemicals Fertilisers Ltd v. Deputy Commissioner [1991 (55) ELT 437 (SC)], it was held by the Hon ble Supreme Court that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary technicality: Modern courts seek to cut down technicalities attendant upon a statutory procedure when these cannot be shown to be necessary to the fulfilment of the purposes of the legislation. These observations have been the foundation in a catena of several decisions of the Tribunal in disputes pertaining to availment of CENVAT credit. 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. 11. The issue on event management ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as input service only if deployed for output service and that exempted service is not output service in view of the definitions in rule 2 of CENVAT Credit Rules, 2004. According to him, the utilisation of the impugned services for themselves, instead of for their customers, is tantamount to exempted service which triggers disentitlement. 13. The fallacy in this proposition is that the procurement of all services by appellant, and chargeable to tax or not, are intended for consumption by themselves with intent to render taxable service to their customers and the conceptual appreciation of this flow appears to have been distorted by the legacy of central excise levy that envisages exemption from duties thereof for captive consumption. It is different versions of this distortion that are reflected in the findings of the adjudicating authority and in the argument of Learned Authorized Representative on the score. Moreover, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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