2008 (7) TMI 280 - AT - Service Tax

Application for staying the operation of the Commissioner (Appeals) order allowing Cenvat credit in respect of the Service Tax paid on security services in the residential colony of the manufacturer - Tribunal in the case of Manikgarh Cement has held that credit in respect of management, maintenance or repair of residential colonies is admissible - credit in respect of security services, prima facie, do not appear to be inadmissible - Commissioner (Appeals) order cannot be stayed

Summary

Issues:
1. Stay application for operation of Commissioner (Appeals) order allowing Cenvat credit on service tax paid for security services in a residential colony.
2. Contention regarding the definition of input services and comparison with the decision in the case of Manikgarh Cement.
3. Comparison of the decision in the case of Mahindra Sona Ltd. regarding inadmissibility of Cenvat credit for catering services in the factory.

Analysis:
1. The case involves an application for staying the operation of the Commissioner (Appeals) order which allowed Cenvat credit on service tax paid for security services in a residential colony. The credit was permitted based on a previous decision of the Tribunal in the case of Manikgarh Cement where credit for input services related to management, maintenance, or repair services for a residential colony was allowed.

2. The contention raised was that the services in question were not covered by the definition of input services. The department had filed an appeal in the High Court against the Tribunal's decision in the case of Manikgarh Cement. The argument was supported by referring to a different case involving Mahindra Sona Ltd. where Cenvat credit for catering services provided in the factory was deemed inadmissible.

3. Upon considering the submissions, the Tribunal noted that the decision in the case of Manikgarh Cement allowed credit for management, maintenance, or repair of residential colonies. Therefore, the credit for security services was considered arguable and not clearly inadmissible. The Tribunal concluded that staying the Commissioner (Appeals) order at this stage would essentially amount to allowing the appeal itself, leading to the rejection of the application for stay.

This detailed analysis highlights the key issues raised in the judgment, the arguments presented by the parties, and the Tribunal's reasoning in reaching its decision regarding the application for stay on the Commissioner (Appeals) order.