2024-VIL-1359-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - CENVAT credit, Management Consultancy services, Personal Expenses - Appellant availed CENVAT credit on various input services – Denial of credit on the grounds that the documents were not in conformity with the Rules, and the expenses incurred by the consultants were personal in nature - Whether the Appellant was eligible to avail CENVAT credit on the Management Consultancy services, including the personal expenses of the Consultants – HELD - the documents based on which CENVAT Credit was availed by the Appellant, contains all the basic information such as description of the taxable service, service tax payable thereon, name, address and registration number of the service provider, etc. Thus, the documents contain all the details as required under proviso to Rule 9(2) of the CCR, 2004. Accordingly, the documents, based on which the Appellant had availed CENVAT Credit, are valid documents - the entire amount paid to the consultants was towards their consultancy fee, and the Service Tax paid on such management consultancy services was an 'input service' to the Appellant - Appellant has rightly availed CENVAT Credit of Service Tax paid by the Business Consultants on the gross value including all the expenses incurred by them during the course of providing management consultancy services - CENVAT credit on the management consultancy services and the input services received at the Head Office and by the group companies, are allowed. However, denial of credit on the services related to funeral, obituary and photography, is upheld. The appellant was directed to pay interest and penalty on the irregular credit availed – the appeal is partly allowed - Whether the Appellant was eligible to avail CENVAT credit on the input services received at the Delhi office and the services received by the group companies – HELD - the Appellant was eligible for the CENVAT credit on the input services received at the Delhi office and the services received by the group companies, as the services were utilized by the Appellant for rendering its taxable output services. The head office could distribute the credit to the units without registration as an Input Service Distributor (ISD) until the mandatory requirement came into effect - As there is no dispute that the said services have been used by the Appellant towards rendering of their output services, the credit cannot be denied on the ground that the invoices issued were in the name of their head office. Even otherwise, mentioning of the head office’s address is only a procedural error, which cannot be a reason to deny the CENVAT Credit which is otherwise eligible to the Appellant – Further, the appellants are eligible for the CENVAT Credit on services received by group companies - Whether the Appellant was eligible to avail CENVAT credit on the services related to funeral, obituary, and photography services – HELD - the CENVAT credit on the services related to funeral, obituary, and photography services is not eligible as these services had no direct or indirect connection with the output services rendered by the Appellant - The credit availed by the Appellant in respect of these services cannot be considered as ‘input services’. Therefore, the CENVAT Credit availed to the extent of these services which are not related to any of the output services, are not available to the Appellant.
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