Cenvat Credit allowable on Furniture used in Guesthouse, part of Factory: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that cenvat credit can be allowed on the furnitures used in guest house which is part of the factory.

The assessee claimed cenvat credit amounting Rs. 11,39,646/- availed on furnitures which were used in the guest house located in the factory. However, the department rejected the same stating that it was not used for business purpose.

The assessee contended that cenvat cannot be denied on furnitures used for business purpose.

The division bench of the Tribunal comprising Member (Judicial), Mr. Ramesh Nair and Member (Technical), Mr. Raju observed that there is no dispute that the said furnitures are used in guest house and the guest house is part of factory.

“In Board‟s Circular No. 943/4/2011-CX, dated 29-4-2011, it is mentioned that “goods such as furniture and stationery used in an office within the factory are goods used in the factory and are used in relation to the manufacturing, business and hence, the credit on the same is to be allowed,” the Tribunal said.

“Undisputedly, the guesthouse is used for operations of the factory. Nothing is available on record to show that guesthouse is used for any other purpose. In view of this fact, since guesthouse used for operations of factory which has direct nexus with factory which produces excisable goods therefore Cenvat credit is admissible to the appellant on the furnitures used in Guest House of the factory,” the Tribunal concluded.

To Read the full text of the Order CLICK HERE

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