CENVAT Credit of Excise Duty Allowable on Renting of Immovable Property service of corporate office which is considered as an Input Service: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit of excise duty is allowable on the renting of immovable property services of corporate office which was considered as an input service. 

General Motors India Pvt Ltd, the appellant assessee used services were in or concerning the manufacture of excisable goods and other business activities concerning the goods manufactured by the assessee, and all these are considered as the input services are admissible to the assessee. 

The assessee appealed against the order passed by the Commissioner (Appeals) to confirm the denial of the CENVAT credit of excise duty. 

Harish Bindu Madhavan, the counsel for the assessee contended that as regards the services of renting of immovable property, in this case, the assessee’s corporate office had taken the office premises on rent and the service Tax paid on such renting of immovable has been distributed proportionately to their two units, which was not under dispute. The Adjudicating authority contended that renting of immovable property service of corporate office had no nexus with the manufacturing activity of the assessee unit. 

Ashok Thanvi, the counsel for the department relied on the decisions made by the lower authorities and contended that the denial of CENVAT credit was as per the law and liable to be sustained. 

The Bench observed that in the case of Ramala Sahkari Chini Mills Ltd. v. Commissioner of Central Excise, the court held that all the services which are related to the manufacture of final products are admissible input services that qualify under the definition of input services provided under Rule 2(l) of the CENVAT Credit Rules, 2004. Therefore, the assessee is entitled to the CENVAT Credit on such services. 

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) quashed the denial of the CENVAT credit which was admissible to the assessee while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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