2017 (3) TMI 308 - AT - Service Tax

CENVAT credit - input services or not? - maintenance and repair services - civil work services - Held that - On perusal of the invoices it is clear that the said services do not fall in the exclusion part of the definition of input services. The works though mentioned is only minor repair works and rennovation works. The definition of input service mostly includes the words modernization , rennovation or repairs of the premises of the provider of output service - the services qualify as input service and are eligible for credit - appeal allowed - decided in favor of appellants.

Summary

Issues: Disallowance of service tax credit on maintenance and repair services and civil work services for the period 2011-2012.

In this case, the appellant filed an appeal against the disallowance of service tax credit amounting to ?5,35,450 for the period 2011-2012. The appellants had availed CENVAT Credit on maintenance and repair services along with civil work services. The original authority confirmed the demand and imposed a penalty. The Commissioner (Appeals) upheld the disallowance but reduced the penalty. The appellant argued that the maintenance services were crucial for the upkeep of office premises and equipment to ensure smooth operations. The civil work services were minor repairs for employee safety. The appellant contended that the services qualified as input services under the definition, which includes modernization, renovation, or repairs of premises. The appellant highlighted discrepancies in the reasons for disallowance by the adjudicating authority and the Commissioner (Appeals).

The Assistant Commissioner reiterated the findings of the impugned order, stating that the services were civil construction works and not maintenance and repair services, justifying the disallowance of credit. However, upon hearing the submissions and examining the invoices, the Member (Judicial) found that the services provided were minor repair and renovation works, falling within the definition of input services. The invoices indicated works related to HP Motor, removal of loose soil, and fitting of vertical lines, which did not fall under the exclusion part of the definition of input services. The Member (Judicial) concluded that the services qualified as input services and were eligible for credit. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential reliefs.