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April 2011

(2011) 21 STR 297 (Tri – Mumbai) – CCEx., Nagpur vs. Ultratech Cement Ltd.

By Puloma Dalal, Jayesh Gogri, Chartered Accountants
Reading Time 1 mins
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Input services used outside factory eligible for CENVAT credit if nexus with ‘manufacture’ is established.

Facts:
A manufacturer of cement claimed CENVAT credit on repairs and maintenance services of river pump used for generation of electricity outside the factory. Such electricity was used in the manufacture of final product. CENVAT credit was denied on the basis that the services are received outside the factory premises and did not have nexus with the manufacture of final products.

Held:
The definition of “input services” does not deny credit if services are utilised outside the factory premises. The nexus in this case with manufacture of final product is established indirectly. In the case of the appellant for the similar issue, the Tribunal had allowed CENVAT credit. Input services used outside factory premises were eligible.

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