M/S. Commissioner Of Service Tax, ... vs M/S. Ajuba Solutions (India) Pvt. Ltd
- CitationAppeal No.350/2013
Ratio decidendi
The rule this decision rests on
Cenvat credit of service tax on an input service is admissible only where there is a demonstrable nexus between that input service and the provision of the taxable output service; where the record does not show such a connection, the credit is not available. Service tax paid on mediclaim (health insurance) for employees, being integrally connected with securing the employees' services for the provision of the output service, is eligible for Cenvat credit. Service tax paid on a Customs House Agent's services in clearing imported goods used in the provision of the output service is eligible for Cenvat credit where a clear nexus exists between that input service and the output service.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No.350/2013 (M-ST), dated 20.11.2013 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Chennai-I ]
M/s. COMMISSIONER OF SERVICE TAX, CHENNAI APPELLANT
Versus
M/s. AJUBA SOLUTIONS (INDIA) PVT. LTD. RESPONDENT
Appearance:
For the Appellant Shri M. Rammohan Rao DC (AR)
For the Respondent Ms. K. Ramya Adv.
CORAM:
Honble Shri D.N. Panda, Judicial Member
Date of hearing/decision 04-03-2015
FINAL ORDER NO. 40198 / 2015
Revenue is in appeal against Cenvat credit of the service tax paid in respect of air travel, travel insurance, vehicle insurance, vehicle maintenance, mediclaim for employees and CHA services allowed by the learned Commissioner (Appeals). Revenues plea is that those are not relevant to manufacture or provision of any taxable service provided by respondent..
2. Respondent on the other hand submits that taxes paid on all the above services being integrally connected with the provision of service, there cannot be denial of Cenvat credit to it.
3. Record does not reveal connection of air travel to the service provided nor the travel insurance. So also the vehicle insurance does not exhibit whether that is in any way relate to output service provided. Revenue succeeds on all these three counts. But mediclaim for employees is integrally connected to secure their services to render provision of output service. Thus, Cenvat credit in respect of such services availed is permissible.
4. So far as CHA service is concerned, it is explained by the respondent that the computers imported warranted availing of services of that agent. The computer so imported being used for provision of output service, there should not be denial of Cenvat credit of service tax paid thereon. Respondent is correct to submit so. In existence of clear nexus between the input service and output services provided, Revenue fails to succeed on such count. Thus, Cenvat credit of service tax paid is allowed.
5. Revenue appeal is allowed partly and stay application stand disposed. (Dictated and pronounced in open court)
(D.N. PANDA) JUDICIAL MEMBER
ksr 06-03-2015
DRAFT Remarks
I II III
Date of dictation 04.03.2015
Draft Order - Date of typing 04.03.2015
Fair Order Typing 06.03.2015
Date of number and date of dispatch 09.03.2015
4 ST/S/40873/2014 and ST/40652/2014
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