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Cenvat Credit is allowable on Security Services utilized at the premises of the Job Workers & Paid by Assessee: Mumbai CESTAT [Read Order]

Mumbai CESTAT, last week allowed Cenvat credit on security services utilized at the premises of the Job workers and paid by assessee under Rule 3 of the CENVAT Credit Rules.

Appellant-Assessee, in the present case, had supplied the service of Fork lift, Crane, Hydra and DG set at the premises of the job worker and they had paid for the said services and availed the credit of the service tax paid thereon.

The bench noted the fact that the said services are used in the premises of the job worker who is doing job work on the goods being manufactured by the appellant.  “Thus it is apparent that the said services have been used for the manufacture of the final product cleared by the appellant though indirectly.”

Allowing the second appeal filed by the assessee, the Tribunal noted that “the definition of input services nowhere specifies that the services have to be received and utilized within the factory. This position has been clearly held by the Tribunal in the case of Maharashtra Seamless Ltd. Rule 3 of the CENVAT Credit Rules specifically provides that credit of tax paid on any input service, used in the manufacture of intermediate products, by a job worker availing the benefit of exemption specified in Notification No. 214/86-C.E. be allowed. I find that the orders relied upon by the departmental representative has not examined the express provision under Rule 3 of Cenvat Credit Rules or the recent clarification dated 19-1-2010 (supra) issued by C.B.E. & C. in the matter.

Adopting the principle laid down by the Mumbai Bench of the Tribunal in the case of Maharashtra Seamless Ltd. v. Commissioner of Central Excise, Raigad, the Tribunal held that Cenvat credit of security services utilized by the appellant at the premises of the job workers and paid for by the appellant cannot be denied in the instant case.

Read the full text of the Order below.

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