Relief for Vodafone Idea: CESTAT Allows CENVAT Credit on Police Booth Maintenance, Treats It as Brand Promotion [Read Order]
CESTAT allows Vodafone Idea to claim CENVAT credit on police booth maintenance, treating it as brand promotion expense.
![Relief for Vodafone Idea: CESTAT Allows CENVAT Credit on Police Booth Maintenance, Treats It as Brand Promotion [Read Order]](https://images.taxscan.in/h-upload/2025/07/18/2064961-vodafone-idea-taxscan.webp "Relief for Vodafone Idea: CESTAT Allows CENVAT Credit on Police Booth Maintenance, Treats It as Brand Promotion [Read Order]")
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) granted relief to Vodafone Idea Limited by allowing CENVAT credit on expenses incurred for maintaining a police booth, treating it as a form of brand promotion. Vodafone Idea Limited had availed CENVAT credit on various input services, including the cost of maintaining a police booth near its...
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) granted relief to Vodafone Idea Limited by allowing CENVAT credit on expenses incurred for maintaining a police booth, treating it as a form of brand promotion.
Vodafone Idea Limited had availed CENVAT credit on various input services, including the cost of maintaining a police booth near its telecom infrastructure. The department denied the credit on the ground that such expenses had no direct connection with the provision of output services and so did not qualify as eligible input services under the CENVAT Credit Rules, 2004.
The appellant's counsel argued that the police booth was constructed and maintained as part of the company’s broader brand visibility and public engagement initiatives. It helped build goodwill and provided indirect security benefits around the company's telecom installations.
The counsel relied on earlier decisions to show that expenses incurred for promotional or public-facing activities, even if not directly connected to the output service, could still qualify as input services if they supported the overall business.
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The department’s counsel argued that maintaining a police booth did not fall within the scope of eligible input services. They argued that there was no direct nexus between the police booth and the taxable telecom services provided by Vodafone Idea.
They argued that such an expense was in the nature of a voluntary act, possibly linked to corporate social responsibility, and was not connected to business promotion or service provision.
The two-member bench comprising Judicial Member P. Dinesha and Technical Member Vasa Seshagiri Rao held that the maintenance of the police booth could be seen as part of the company’s brand-building efforts and had a sufficient nexus with the business.
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The tribunal ruled that such expenses fall under the broad definition of input services when they contribute to the promotion of the company’s brand and business activities, even if indirectly.
The tribunal allowed the CENVAT credit on this ground, treating police booth maintenance as a legitimate brand promotion activity under the law. The appeal was allowed to this extent, marking a unique and precedent-setting interpretation in favor of the assessee.
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