TMI Blog2023 (4) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... the ISD These units (availing credit passed by ISD) file returns which show, among other things, the CENVAT credit availed. The jurisdictional officers have to scrutinize and assess them and if any CENVAT credit is irregularly availed on the strength of invoices (including ISD invoices), it can be recovered under Rule 14 of CCR from them. The case laws relied upon by the learned counsel deal with situations where the jurisdictional officer of the assessee who used the CENVAT credit wanted to reassess the duty paid by the manufacturer of the goods - reliance can be placed in the case of COMMISSIONER OF CENTRAL EXCISE CUSTOMS VERSUS MDS SWITCHGEAR LTD. [ 2008 (8) TMI 37 - SUPREME COURT] and CST, AHMEDABAD VERSUS GODFREY PHILIPS INDIA LTD. [ 2008 (12) TMI 90 - CESTAT, AHMEDABAD] . The SCN was issued correctly by the Commissioner and the impugned order was issued as per his jurisdiction. The question of jurisdiction is answered in favour of the Revenue. Advertising services - Case of Revenue is that at the time the services were availed, Coromandel brand did not belong to the appellant - HELD THAT:- A plain reading of Rule 2(l) of CCR allows credit of advertising expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he programme which is being organized. Instead, he indicates the services which he provided and the name of the client - the services rendered towards the annual awards or other programmes for the dealers have a direct nexus to sales promotion and CENVAT credit is admissible on such services. Accordingly, we allow CENVAT credit of Rs. 34,800/- availed by the appellant on these services. Mandap keeper services - HELD THAT:- If the invoice was issued to the appellant and it was for food for 1100 persons and the appellant claims that it was for their business function, there is no reason to doubt and say that it was for a private function in the absence of any evidence that the invoice meant for a personal function was shown as an invoice for official meeting and billed to the appellant - thus, the appellant was entitled to CENVAT credit of this amount. Tour operator Services - HELD THAT:- Given the nature of the invoice in question, it does appear to be an invoice for holiday of a large number of persons. There appears nothing to show that this expense was on account of any business trip. In view of the specific exclusion of the services meant for personal consumption or us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order is passed in terms of the provisions of Section 174 read with Section 142 (8) (a) of Central Goods Service Tax Act, 2017 . 2. Revenue s appeal E/51610/2019 assails the allowing of CENVAT credit on Advertising Services while the Assessee s appeal E/52298/2019 assails the denial of CENVAT credit on other services, invocation of extended period of limitation and imposition of penalty. It also challenges the jurisdiction of the Commissioner to issue the SCN and issue the impugned order. We have considered the submissions by Shri Sanjay Singh, learned authorised representative for the Revenue and Ms. Asmita Singh, Learned counsel for the assessee and perused the appeals. 3. During the relevant period, the assessee, M/s. Trinetra Cements, Rajasthan was a subsidiary of M/s. India Cements; it manufactured cement and clinker and availed CENVAT credit of the excise duty paid on its inputs and service tax paid on its input services including the service tax passed on to it by its head office in Gujarat through input service distributor invoices under the CENVAT Credit Rules, 2004 [CCR]. Its head office in Gujarat was registered as an Input Service Distributor [ISD] under the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the CENVAT was taken. CENVAT credit availed on the strength of ISD invoices can also be recovered under Rule 14 of CCR and there is no provision under the CCR to issue a notice to or recover CENVAT credit from the ISD. 7. We have considered the submissions on this issue. Input Service Distributor is defined in Rule 2(m) of CCR as follows: Rule 2 (m) input service distributor means an office of the manufacturer or producer of final products or provider of output service, which receives invoices issued under rule 4A of the Service Tax Rules, 1994 towards purchases of input services and issues invoice, bill or, as the case may be, challan for the purposes of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, or an outsourced manufacturing unit as the case may be; ISD are registered with the Service Tax and issue ISD invoices under Rule 4A (2) of Service Tax Rules, 1994 which reads as follows: 4A. Taxable service to be provided or credit to be distributed on invoice, bill or challan - (1) (2) Every input service distributor distributing credit of taxable services shall, in respect of credit distribute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit has been taken and utilised wrongly or has been erroneously refunded, the same shall be recovered along with interest from the manufacturer or the provider of output service, as the case may be, and the provisions of sections 11A and 11AA of the Excise Act or sections 73 and 75 of the Finance Act, 1994, as the case may be, shall apply mutatis mutandis for effecting such recoveries. RULE 15. Confiscation and penalty. (1) If any person, takes or utilises CENVAT credit in respect of input or capital goods or input services, wrongly or in contravention of any of the provisions of these rules, then, all such goods shall be liable to confiscation and such person, shall be liable to a penalty in term of clause (a) or clause (b) of sub-section (1) of section 11AC of the Excise Act or sub-section (1) of section 76 of the Finance Act (32 of 1994), as the case may be. 9. We do not find any provision under which the ISD which does not avail or utilize the CENVAT credit but merely passes the credit through ISD invoices to its units can be issued a notice and any wrongly passed CENVAT credit can be recovered from it. On a specific query from the bench, learned counsel for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner and the impugned order was issued as per his jurisdiction. We answer the question of jurisdiction in favour of the Revenue. Advertising services 12. Revenue s appeal is only against the Commissioner allowing service tax on advertising services to the appellant. It is not in dispute that the expenses were incurred on advertisement and that the ISD invoice was issued passing on the service tax paid on such service. It is also not in dispute that advertising services are specifically covered in the inclusion part of the definition of input service under Rule 2(l) of the CCR which, as applicable during the relevant period, read as follows: Rule 2 (l) input service means any service, - (i) used by a provider of [output service] for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit. If company A manufactures goods under the brand name belonging to company B under licence, it is natural for A to advertise its goods with that brand name and such advertising expenses get squarely covered under Rule 2(l) of CCR. We, therefore, find that the assessee was entitled to CENVAT credit on advertising services and the Commissioner has correctly allowed CENVAT credit. Revenue s appeal deserves to be dismissed. The other submissions by both sides regarding the date of amalgamation of the assessee with M/s. India Cements are irrelevant as we find that there is no requirement that the brand name under which the goods have been advertised must belong to the assessee. CENVAT Credit on other services 17. We now proceed to examine the CENVAT credit denied by the Commissioner on the four other services which form the subject matter of appeal E/52298/2019 filed by the assessee, M/s. India Cements (formerly known as Trinetra Cements). Business Auxiliary Services and Services of hotels and restaurants 18. Learned counsel submits that an amount of Rs. 31,96,936/- availed by the appellant on the restaurant and hotel services was denied to it as Business Auxil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KC) on 256 invoices. The chart does not contain details of services availed by the assessee and I have therefore gone through the invoices submitted by them. I observe that invoices contain a varied and very sketchy description of the services availed by the assessee viz., (1) Administrative expenses/ Fix Administrative cost/MO expenses (month wise) (2) Travelling expenses for Gold distribution functions/Gold melas expenses (3) Transportation/hire charges paid to taxi Quarterly maintenance charges for office of ISD (4) Food expenses for Bus drivers and cleaners of various buses during annual gold function (5) Four wheeler hire expenses/transportation charges (6) Courier charges (7) Surat office renovation (8) Movie ticket expenses along with snacks (9) Navratri Garba entry passes (10) Food bills (11) Pen and chocolate expenses for wishing marriage anniversary (12) Family get together expenses (13) Padyatri biscuit distribution expenses (14) Plant visit charges (15) Water park charges (16) Hotel/banquet charges inclusive of room service charges, etc. I observe that out of total input service credit of Rs. 31,96,936/- majority credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and an exclusion clause which reduces its scope. Any services availed on vehicles and service tax paid on service component of any works contract for construction of a building are clearly excluded from the scope of input services . Therefore, even if such services fall in the means portion of the definition of input services , they do get excluded by the exclusion clause of the definition. 22. Since the appellant is claiming the benefit of CENVAT credit, it is for the appellant to show how the services fall within the definition of input service . The submission of the learned counsel for the appellant is that all these programmes from gold distribution melas to marriage anniversary and food bills should be treated as expenses towards business promotion. We do not agree. Every expense which any business incurs will have some bearing or relationship with its business and if the intention of the CENVAT credit Rules is to allow CENVAT credit on every bill, they would have said so. Instead, credit is confined to duty paid on inputs and service tax paid on input services and a detailed definition of input services is provided . We are not convinced that celebrating marriage anni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly denied the CENVAT credit on the ground that one of the bills under this head is for food charges for 11 persons and it is not clear whether any business meet was held or not. 28. Learned authorised representative for the Revenue supports the impugned order and reiterates its findings. 29. We find that the Commissioner observed that he had examined the invoice issued by M/s. Madhuban Resorts Spa and it was not for Mandap keeper services but was actually food charges for 1100 persons @ Rs. 840 per person and that it is not clear whether any business meet was organized or it was for a personal function. Accordingly, he disallowed the credit. 30. We find that if the invoice was issued to the appellant and it was for food for 1100 persons and the appellant claims that it was for their business function, there is no reason to doubt and say that it was for a private function in the absence of any evidence that the invoice meant for a personal function was shown as an invoice for official meeting and billed to the appellant. We, therefore, hold that the appellant was entitled to CENVAT credit of this amount. Tour operator Services 31. Learned counsel submits that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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