Order Date – 18 April 2023

Parties: M/s. Trinetra Cements (Now known as M/s India Cement Limited) Vs The Commissioner, Central Excise & CGST, Udaipur

Facts –

• The Appellant, M/s. Trinetra Cements, Rajasthan was a subsidiary of M/s. India Cements; it manufactured cement and clinker and availed CENVAT credit of the excise duty paid on its inputs and service tax paid on its input services including the service tax passed on to it by its head office in Gujarat through input service distributor invoices under the CENVAT Credit Rules, 2004
• Show Cause Notice dated 7.5.2018 was issued alleging that the appellant has wrongly availed CENVAT credit and in OIO allowed CENVAT credit on the Advertising services and confirming the proposal to deny CENVAT credit on the remaining services.
• Both the appellant and revenue filed an appeal.

Issue –

• Whether the appellant had rightly availed CENVAT credit on services?

Order –

• The Tribunal observed that a plain reading of Rule 2(l) of CCR allows credit of advertising expenses and it does not place on any restrictions on what type of advertising qualifies for CENVAT credit. So long as the advertisement is for the excisable goods sold or the taxable services rendered, there can be no restriction on availing the CENVAT credit.
• In particular, there is no condition that the brand which has been advertised should have been owned by the assessee availing CENVAT credit. Hence it was held that the assessee was entitled to CENVAT credit on advertising services and the Commissioner has correctly allowed CENVAT credit.
• It was further held that the services rendered towards the annual awards or other programmes for the dealers have a direct nexus to sales promotion and CENVAT credit is admissible on such services. Hence it allowed CENVAT credit availed by the appellant on these services
• If the invoice was issued to the appellant and it was for food for 1100 persons and the appellant claims that it was for their business function, there is no reason to doubt and say that it was for a private function in the absence of any evidence that the invoice meant for a personal function was shown as an invoice for official meeting and billed to the appellant. Hence it was held that the appellant was entitled to CENVAT credit of this amount. 
• Given the nature of the invoice in question, it does appear to be an invoice for holiday of a large number of persons. The Tribunal did not find anything to show that this expense was on account of any business trip. In view of the specific exclusion of the services meant for personal consumption or use of any employee in the definition of “input service‘, it was held that no CENVAT credit will be admissible on this account.