Case Details: Gail Training Institute Versus Commissioner, Central Excise and Service Tax, New Delhi (2025) 30 Centax 264 (Tri.-Del)
Judiciary and Counsel Details
- Justice Dilip Gupta, President & Shri P.V. Subba Rao, Member (T)
- Ms Shagun Arora & Shri Kunal Agarwal, Advs., for the Appellant.
- Shri Rajeev Kapoor, Authorised Representative, for the Respondent.
Facts of the Case
The appellant, a training institute within the GAIL group, availed CENVAT credit on service tax paid for training services provided by it to employees of other GAIL group entities. These training services were not imparted to the appellant’s own employees but to employees working across various GAIL locations. The Revenue denied the credit on the ground that the trained employees were not employed by the appellant and that such services were not used in relation to the appellant’s output service, which is defined as ‘commercial training and coaching service’.
The appellant contended that, since it formed part of the GAIL legal entity, it was entitled to credit on training services provided to any GAIL employees. The appellant filed an appeal before the Hon’ble Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi.
CESTAT Held
The CESTAT Delhi, held that the training services were not used by the appellant institute to provide its output service and, therefore, did not qualify as input service under Rule 2(l) of the CENVAT Credit Rules, 2004. The Tribunal observed that coaching and training of GAIL employees by other institutions could not be treated as input service for the appellant. Consequently, the denial of credit was upheld as correct. This decision clarifies that CENVAT credit is admissible only when input services are used directly in relation to the appellant’s own output services.
