Annual day function is an integral part of business activity - Mandap keeper service is an Input service
THE appellant celebrated the Annual Day function which was attended by the employees and their family members as well as the employees of their sister units. To make the event a grand one, they had hired the services of a Mandap keeper.
Needless to say, the Mandap Keeper had to discharge his Service Tax liability and the appellant availed the CENVAT credit of the same.
Revenue was probably not invited to this Annual Day celebration and held a grouse.
A Show cause notice was issued for denial of the CENVAT credit taken on the ground that ‘Mandap Keeper service' is not an Input service in terms of rule 2(l) of the CCR, 2004.
Both the lower authorities denied the credit and so the appellant is before the CESTAT.
The appellant cited the decisions of the High Courts in the case of Toyota Kirloskar Motor Pvt. Ltd. vs. CCELTU, Bangalore () and CCE Nagpur vs Ultratech Cement Ltd. () to justify their claim of CENVAT and the Revenue representative cited the decisions in CCE Nagpur vs Manikgarh Cement - and Eicher Motors Ltd. vs. CCE Indore - to support the department stand.
The Bench distinguished the decisions cited by the Revenue and allowed the appeal by observing - "It is not in dispute that the Annual Day function of the appellant Company was celebrated and for the function the employees and their families were invited. The annual day function of the appellant company is an integral part of the business activity and it is also found that the appellant is the manufacturer of excisable goods. Therefore, by relying the decisions of Ultratech Cement Ltd.(supra) and Toyota Kirloskar Motor Pvt.Ltd. (supra), the appellant is entitled to input service credit on Mandap Keeper Service…. "