M/S Vodafone South Ltd vs C.C.E. & S.T.-Chandigarh-Ii

Date of Pronouncement:29/06/2015

Appeal No. ST/51005/2015-ST(SM)

(Arising out of OIA No. JAL-EXCUS-000-APP-228-229-14-15 dated 12.12.2014 passed by Commissioner of Central Excise (Appeals) Chandigarh-II)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

4. Whether order is to be circulated to the Department Authorities?

M/s Vodafone South Ltd. Appellant

Vs.

C.C.E. & S.T.-Chandigarh-II Respondent

Appearance:

Present for the Appellant: Shri Narendra Kumar Singhvi, Advocate

Present for the Respondent: Shri R.K. Grover, DR

Coram: Honble Ms. Sulekha Beevi C.S., Member (Judicial)

Final Order No.52042/2015

Per: Sulekha Beevi C.S.

Brief facts are as under:-

1. The appellant is engaged in rendering telephone services and holds service tax registration for various categories. Pursuant to an audit and scrutiny the appellant was issued a show cause notice dated 05/10/2011 alleging that during the year 2006  07 to 2010  11, the input service credit of Rs.16,45,097/ on input services, namely, Training programme/Guest House Maintenance, Reimbursement of expenses of off  roll employees, Photostat charges etc availed by the appellant did not qualify the definition of input service under Rule 2 (l) of Cenvat Credit rules, 2004.

Details of Cenvat credit alleged in the show cause notice as not admissible are as under:

S.No. Name of the Party Service Description

Total

1.

M/s J&G Corporate Solutions Private Limited Training Programme/Guest House Maintenance 279470

2. M/s Sunrise House Keeping and Support Services Pvt. Ltd.

Training Programme/Guest House Maintenance 75137

3. M/s Competent Personnel & Allied Services Pvt. Ltd.

Reimbursements of expenses of off-roll employees 1096862

4. M/s Ricoh India Pvt. Ltd.

Photocopy Charges 71095

5. M/s Harjas Enterprises Photocopy Charges 23572

6. M/s Shiva Computer Pvt. Ltd.

Photocopy Charges 12593

7. M/s Broadways Mktg. Co. Pvt. Ltd.

Photocopy Charges 86368 Total

1645097

2. The above show cause notice was finalized vide order-in-Original dated 24/01/2013 whereby the adjudicating authority allowed Cenvat credit of Rs.75,137/ on the Housekeeping charges received from M/s Sunrise Housekeeping And Support Services (P) Ltd. However input service credit of Rs.2,79,470/ on Housekeeping charges received from M/s J & G Corporate Solutions (P) Limited was disallowed on the ground that the copy of the agreement was not produced. The input service credit of Rs.1,93,628/ on Photo Copy charges was disallowed. An amount of Rs.10,96,862/ as input service credit on account of Reimbursements of expenses of the off roll employees was also disallowed.

3. Aggrieved, the appellant filed appeal against the Order-in-Original before the Commissioner (Appeals). The Department also preferred appeal against the order allowing Cenvat credit on the Housekeeping services availed from M/s Sunrise Housekeeping And Support Services (P) Ltd. The Commissioner (Appeals) dismissed the appeal filed by the Department holding that the Housekeeping services availed from M/s Sunrise Housekeeping And Support Services (P) Ltd. qualified as an input service for availing Cenvat credit. But however, on the appeal filed by appellants the Commissioner (Appeals) disallowed the Cenvat credit of Rs.2,79,470/ relating to Housekeeping services received from J & G Corporate Solutions (P) Ltd. The input service credit on Photo Copy charges and input service credit on Reimbursement of expenses incurred by off - roll employees were allowed. The appellant has hence preferred this appeal challenging the disallowance of input service credit of Rs.2,79,470/- on Housekeeping services provided by M/s J & G, Corporate Solutions (P) Ltd.

4. Thus the only issue that arises for consideration is whether Training/guesthouse maintenance services provided to the appellant by M/s J & G Corporate Solution would qualify as input service for availing Cenvat credit. It is pertinent to note that the same services i.e; Training/guesthouse maintenance services provided to the appellant by M/s Sunrise Housekeeping and Support Services (P) Ltd. was allowed by the adjudicating authority. Moreover, the appeal filed by the Department against the same was dismissed by the Commissioner (Appeals). This can lead to the only conclusion that the services of Training programme/guesthouse maintenance has been accepted by the Department as qualified as input service for availing Cenvat credit. The Commissioner (Appeals) has disallowed the Cenvat credit of Rs.2,79,470/- relating to Training program/guesthouse maintenance provided to the appellant by M/s J & G Corporate Solutions. The adjudicating authority rejected on the ground that the appellant did not produce the copy of the agreement with J & G Corporate Solutions (P) Ltd. Whereas, the Commissioner (Appeals) in para 6.8 of the Order-in-Appeal has after perusing the agreement and documents taken the view that in the agreement dated 17.8.2007, the scope of work highlighted that the Service Provider is engaged, inter alia, in the business of providing housekeeping, kitchen facility including cook, crockery, cutlery and kitchenware, horticulture, maintenance and other facilities to the appellant at the Guest House located at Mohali and that the said services did not cover under the definition of input service. So also that the judgments quoted by the appellant no where speak about admissibility of housekeeping service at Guest House as input service. I cannot with hold from saying that this view is in total contradiction to the view taken by Commissioner (Appeals) in para 7 of the Order-in-Appeal whereby the House-keeping Service provided by M/s Sunrise House keeping & Support Service Pvt. Ltd was upheld rejecting the appeal filed by the Department.

5. The appellants relied on the judgments rendered In LOreal India Private Limited Vs CCE, Pune  I 2011 (22) STR 89 (Tri  Mumbai), M/s Ultratech Cement Ltd Vs CCE, Jaipur II 2014 TIOL 656 CESTAT Del, CCE, Nasik Vs Mahindra and Mahindra Ltd 2014  TIOL  746 CESTAT Mum. It has been categorically held in the above judgments that guesthouse maintenance service qualifies for input service credit if such services are related to the business activity of the assessee. In the present case, the appellants are engaged in rendering telecommunication services and the facility of housekeeping/maintenance of guesthouse is a facility provided for the purposes of its employees or guests who were traveling for work purposes.

6. By following the law laid in the above judgments, I hold the services of Housekeeping / maintenance of guesthouse provided by M/s J & G Corporate Solution Pvt. Ltd. qualifies as input service and the appellants are eligible for the benefit of Cenvat Credit.

7. The appeal is allowed, with consequential relief to the appellant.

(Pronounced on 29/06/2015)

(Sulekha Beevi C.S.)

Member (Judicial)

K. Gupta

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