SHARE

| Sep-21-2021

CESTAT allows Cenvat credit for skill competition between dealers and employees

In M/S MARUTI SUZUKI INDIA LTD. v. COMMISSIONER OF CE & ST, GURUGRAM [FINAL ORDER NO. 60893/2021 dated September 07, 2021], M/s Maruti Suzuki India Ltd. (“the Appellant”) is in appeal against the impugned order wherein cenvat credit on event management service has been denied on the ground that the same does not cover under Rule 2(l) of the Cenvat Credit Rules, 2004 as input service.

The Appellant is a manufacturer of motor vehicles and parts thereof and paying excise duty on all clearances. The Appellant is availing various kinds of input services including event management service. In this case, the dispute is with regard to availment of cenvat credit on two types of event management services, namely Skill Competition between dealers and employees and other business events services like Vishwakaram Puja, inauguration of production line, etc.

The reason for denial of Cenvat credit is that these services are not related to manufacturing activity or sales promotion of the Appellant therefore they are not entitled to cenvat credit.

The Hon’ble CESTAT, Chandigarh held that that the Appellant has rightly taken the Cenvat credit for the above-discussed services and explained that:

Skill Competition between dealers and employees – The said competition is an event which shows the sale skill of the employees as well as the dealers. The skills of the employees show that how they participate in bringing more production of the product and the skills of the dealers shows that how they increased the sale of the product. Therefore, the said service is an integral part of manufacturing as well as sale activity, which is conducted by the Appellant. In these circumstances, the said service does qualify as input service in terms of Rule 2(l) of the Cenvat Credit Rules, 2004. Accordingly, the Appellant is entitled to Cenvat credit for the said service.

Other business events services – Vishwakarma Puja and inauguration of new pipe line are basically two others business events services for which Cenvat credit was sought to be denied. In fact, Vishwakarma Puja is a big festival for the workers who work on machines and they pray to the God for good running of their machines by doing Vishwakarma Puja. Further, when a new pipe line starts, a puja is performed for good running of this pipe line. In these circumstances, these two pujas are also integral part of manufacturing activity. Therefore, for these services also, the Appellant is entitled for cenvat credit.

Therefore, CESTAT do not find any merit in the impugned order qua denial of cenvat credit on the above services and the same is set aside.

The appeal is allowed.

Online GST Course by Bimal Jain

Recorded: Certified Advanced GST Course

Course Details: Certificate of Participation will be Provided, Free GST Updates on E-mail, WhatsApp, Telegram for 1 Year, Background Material and PPT will be Provided on the downloadable basis, Total 21 Recorded Sessions (60 Hours), will be available for 120 hours or 60 Days whichever expires earlier.

For Registration:- https://cutt.ly/hxjl5Cu

Recorded: GST Course on Exports, Deemed Exports, SEZ, Imports, Merchandise Exports, Inverted Duty Structure (including Refunds)

Course Details: 6 Online Recorded Sessions of 2.30Hrs each with Background Material (BGM)

For Registration:- https://cutt.ly/pvw7mzl

For more details,
Call:
+91-8076563802 | E-mail: intern@a2ztaxcorp.com | Web: www.a2ztaxcorp.in

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.

Similar reads

Patiala Court sought response on the non-initiation of action against firms evading GST from CBIC

In State v. Mohit Maan [FIR No. 301/2020 dated September 29, 2021] the Honorable Patiala House Court sought a response from Central Board of Indirect Taxes and Customs (“the CBIC”) for not initiating

Sep-21-2021

Read More

Handling of cargo in Customs area will always be responsibility of the Custodian

In Delhi International Airports Pvt. Ltd. v. Commissioner of Customs (Appeals) [FINAL ORDER No. 51832 /2021 dated September 23, 2021], Delhi International Airports Pvt. Ltd (“the Appellant”) has filed

Sep-21-2021

Read More

Goods pilfered after the order of clearance by the Custom Officer not the responsibility of Custodian

In M/s. MTI Materials Pvt. Ltd. v. the Commissioner of Customs, Delhi [FINAL ORDER No. 51835/2021 dated September 23, 2021], M/s. MTI Materials Pvt. Ltd (“the Appellant”) has filed the current appeal

Sep-21-2021

Read More

SCN issued by DRI stayed for lack of authority under Customs Act

In M/s. Aktel by Proprietorship Anand Kumar and Ors v. Union of India and Ors. [WPO No. 822 of 2021] the writ petition in the current matter has been filed by M/s. Aktel by Proprietorship Anand Kumar

Sep-21-2021

Read More

Refund of wrongly reversed CENVAT credit cannot be rejected solely on the ground of non-filing of under protest letter

In Prayosha Healthcare Pvt Ltd v. C.C.E. & S.T.-Vadodara-ii [Excise Appeal No.11102 of 2018 dated September 21, 2021], the current appeal has been filed against Order-in-Appeal OIA-VAD-EXCUS-002-APP-6

Sep-21-2021

Read More