Cenvat Credit not allowable for Service Tax paid on the Storage / Warehouse Services: CESTAT [Read Order]

Cenvat Credit not allowable for Service Tax paid on the Storage / Warehouse Services: CESTAT [Read Order]

Cenvat Credit - Service Tax - storage - warehouse services - CESTAT - Taxscan

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that cenvat credit is not allowable on the service tax portion paid while paying rent for the storage and warehousing services.

The appellant-Company took the subject premises on rent for the storage/ warehouse services availed for storing the imported inputs and claimed cenvat credit on the service tax paid on the same. However, the department rejected the request for credit on the ground that the appellant has wrongly availed the credit of Service Tax in respect of the rent paid for the warehouse/godown used for storing the imported inputs since the warehouse/godown had separated from Central Excise registration and were not registered as a first stage /second stage dealer by the appellant for storage of its goods, out of the total Cenvat Credit on storage and warehousing services.

The assessee contended before the Tribunal that it is a settled law that location of service received is not material as irrespective of location of receipt of service it should have nexus with the manufacture and in the business activity of the assessee. Therefore, even though the warehouse and godown are located outside the factory premises but the same are admittedly used for storage of inputs which is used for manufacture of final product. The said services are clearly covered under the definition of input services, they argued.

Overruling the above contentions, Judicial Member Ramesh Nair contended that the appellant is required to obtain the permission for storage of inputs outside the factory premises.

“In the present case, there is no allegation that the appellant have availed the Cenvat Credit in respect of the inputs lying in warehouse outside the factory. Therefore, in the given facts Rule 8 is not applicable, moreover, as regard the Cenvat Credit in respect of input services Rule 8 does not come into the play, for the reason that as discussed above the location of the receipt of service is not material and Rule 8 is not relevant for thepurpose of availing the Cenvat Credit on the input service namely renting of immovable property,” the Tribunal said.

Subscribe Taxscan AdFree to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. We welcome your comments at info@taxscan.in

Related Stories

Taxscan Annual Subscription @599 @420+GST
* Offer extended till 31st May
Taxscan Annual Subscription @599 @420+GST
* Offer extended till 31st May