Outdoor Catering and Air Travel Agency Service are Input Services: CESTAT Allows Refund Claim [Read Order]

The CESTAT, Bangalore bench, while allowing Cenvat Credit to M/s. Nvidia Graphics Pvt. Ltd, recently held that Outdoor Catering and Air Travel Agency service are Input Services.

Appellants, engaged in providing Information Technology Software Service and Business Auxiliary Services claimed refund of unutilized CENVAT credit paid on input services used for the services exported by them during the impugned period under Rule 5 of CENVAT Credit Rules. However, the department partly rejected amounts claimed and held that certain services such as Outdoor Catering and Air Travel Agency service, Renting of Immovable Property service, Event Management Service etc., are ineligible input services.

However, the first appellate authority reversed the order and remanded the matter back to the files of the authority with a direction to allow the claim by verifying the documents and invoices.

Thereafter, the original authority after following the de novo adjudication process, sanctioned portion of the amount involved while rejecting the balance amount as shown in the table above.

Before the Tribunal, the appellants, relying on various decisions, argued that the said services are eligible input services for which Cenvat credit can be allowed. They contended that the catering service will be provided free of cost to its employees and the company will not charge any amount for the Outdoor Catering Service to its employees. The Commissioner (A) has rejected the refund on these services only on the ground that the appellant has not proved that they have not recovered any charges from the employees for providing Outdoor Catering Service.

With regard to the claim in respect of Air Travel Agency service, the appellants submitted that all the services fall in the definition of input services even after the amendment in the definition of input service w.e.f. 1.4.2011. Further, the first appellate authority rejected the claim on ground of non-production of any document to prove that the service was availed for official purpose.

While allowing the appeal, the bench found that the impugned order denying the refund on input services on account of lack of nexus is not sustainable. “In view of definition of input service as contained in Rule 2(l) of CENVAT Credit Rules, all these input services on which refund has been denied are related to the provisions of Export of Service. Further, for the subsequent period, the Department itself has allowed the refund on certain services and this Tribunal in the appellantis own case also vide Final Order No.20050-20057/2017 dated 13.1.2017 has allowed the refund on Renting of Immovable Property service and Event Management Service. In view of the decisions cited supra, I am of the considered view that all these services fall in the definition of input service and the appellants are entitled to claim refund subject to verification of documents. The original authority will verify the documents and then sanction the refund. Accordingly, I allow all the three appeals,” the bench said.