By Puloma Dalal, Jayesh Gogri, Chartered Accountants
fiogf49gjkf0d
Services of construction of staff quarters whether an input service for providing output service – Reference to division bench considered in view of two different views of co-ordinate benches.
Facts:
Revenue denied CENVAT credit on input services for construction of staff quarters. Appellant contended that if services are used in the ‘premises’ of service provider, CENVAT credit is allowed in view of the definition of “Input Services”. It is not relevant whether this is the ‘premises’ where service is actually provided or “office premises” or “residential premises”. Moreover, the matter is decided by the Tribunal in favour of appellant in appellant’s own case for prior periods.
The revenue contended that the word ‘premises’ should not be considered in isolation. It cannot include every ownership premises of service provider. It should have connection with the activities of providing output services as decided by the Tribunal in case of Manikgarh Cement Works (2010) (18 STR 275).
Held:
Ownership of the premises is not relevant for claim of CENVAT credit. Input services should be used in or in relation to provision of output service so as to be eligible for CENVAT Credit. However, the issue is decided by the Tribunal in appellant’s favour earlier. There being two different decisions of the co-ordinate benches, the matter is placed for considering reference to Division Bench.
