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CENVAT –Period Prior to 01-04-2011- A commercial training or coaching centre cannot take CENVAT credit of input services availed for celebration meant for successful candidates
Facts:
The assessee was providing commercial training and coaching services to students. The issue before the Court was whether assessee is entitled to CENVAT credit on input services of catering, photography, tent (mandap keeper), maintenance & repairs (motor vehicles), rent for hiring examination hall and travelling expenses. Tribunal denied the CENVAT credit except on the rent for hiring examination hall.
Held:
The High Court held that, celebrations are organized during academic sessions to encourage existing students and motivate new students. These services are used only after students pass commercial training or coaching classes/examination. Therefore, since these celebrations are held only after commercial training or coaching classes are over, said activities cannot be said to have been used to provide output service. Further, credit of repairs & maintenance expenses in motor car and travelling expenses incurred for the business tours was not allowed treating the same as not related to provision for commercial training or coaching service.
Note: There is no discussion in the order as to why services availed for student’s celebration shall not be entitled to CENVAT credit as “activity relating to business”.
