HINDUSTAN ZINC LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE relevant facts of the case as per records, in brief, are that the appellants are engaged in the manufacture of Zinc Lead, Sulphuric Acid and Copper. The appellants availed input service credit of Rs. 5,58,961/ - on the basis of invoice issued by M/s. Innuenodo Communication in respect of service tax paid on "Event Management service" provided to the appellants in connection with celebration of expansion of their Chanderia plant. Original authority disallowed the credit and confirmed the demand of Cenvat credit of Rs. 5,58,961/ - and imposed penalty of Rs. 10,000/ - under Rule 15(3) of the Cenvat Credit Rules, 2004 along with interest. Commissioner (Appeals) upheld adjudication order.

(2.) THE learned Advocate on behalf of the appellants submits that Event Management service was utilized by the appellant -company relating to the business activity insofar as the celebration of expansion of their Chanderia plant which is covered within the definition of "input service" under Cenvat Credit Rules, 2004. He submits that the cost of Event Management service has been included in the assessable value. He relied upon the decision of the Larger Bench of the Tribunal in the case of CCE, Mumbai -V v. GTC Industries Ltd. reported in : 2008 (12) S.T.R. 468 (Tri. -LB). He also submits that the Larger Bench of the Tribunal in the case of ABB Ltd. v. CCE & ST reported in : 2009 (15) S.T.R. 23 (Tri. -LB) held that the definition of input service has to be interpreted in the light of the requirement. He submits that celebration of expansion of Chanderia plant is for advertisement or sales promotion. He submits that under Section 37(1) of Income -tax Act, 1961 expenditure incurred by the assessee in connection with inauguration ceremony on commissioning new project, is allowed as business expenditure. In this connection, he relied upon the decisions of the Hon'ble High Court as under -

(3.) AFTER hearing both sides and on perusal of the records, I find that the appellant -company availed input service credit on Event Management service in connection with celebration by the employees on expansion of Chanderia plant. The dispute relates to as to whether the Event Management service would be treated as "activities relating to business" under Rule 2(1) of the Rules. Learned advocate drew the attention of the Bench to the expression "business" as referred in decision of the Larger Bench of the Tribunal in the case of A.B.B. Ltd. (supra). It has been held that the expression "business" is a term of wide import as held by the Apex Court in Mazgaon Dock Ltd. v. Commissioner of Income -tax and Excess Profits Tax : AIR 1958 SC 861. Further the definition of 'input services' uses the expression "activities relating to business". The word 'relating' further widens the scope of the expression "activities relating to business".