2010 (4) TMI 370 - AT - Service Tax

Cenvat Credit- - Cenvat credit of Service tax paid for construction of Executive Staff Quarters at Karur has been disallowed to the assessees on the ground that the staff residential quarters cannot be construed as office relating to bank premises and, therefore, is not an input service in terms of Rule 2(l) of the CENVAT Credit Rules. Held that- The definition of input service includes services used in the premises of a provider of output service. Therefore, they are covered by the definition of input service in Rule 2(l) and, therefore, they are entitled to take CENVAT credit of the entire Service tax paid. Therefore, set aside the impugned order and allow the appeal.

Summary

The Appellate Tribunal CESTAT, Chennai allowed the appeal regarding disallowance of Cenvat credit for Service tax paid on construction of "Executive Staff Quarters" at Karur. The Tribunal ruled that staff quarters are considered premises of the bank and qualify as 'input service' under Rule 2(l) of the CENVAT Credit Rules. Therefore, the assessees are entitled to take CENVAT credit of the entire Service tax paid.