Subscribe to the Bombay Chartered Accountant Journal Subscribe Now!

May 2014

2014 (33) STR 501 (Guj.) Commissioner of C. Ex. & Customs vs. Ultratech Cement Ltd.

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 2 mins
fiogf49gjkf0d
Whether Service Tax paid on insurance of vehicles used for the residents of worker’s residential colony is eligible input service for availment of the CENVAT Credit? Held, no.

Facts:
The respondents, cement manufacturers availed the CENVAT Credit of Service Tax paid on insurance services for the residential colony and of the vehicles specially used for travelling of workers from their colony to the factory. Placing reliance on the decision of the Delhi Tribunal in the case of M/s. Triveni Engg & Industrial Ltd. vs. CCC, Meerut, 2008 (12) S.T.R. 330, the Tribunal had upheld the assessee’s contention that the phrase “activities in relation to business” used in the inclusive part of the definition of input services was wide enough to cover such services.

Held:
The Hon’ble High Court observed the case of Commissioner vs. Gujarat Heavy Chemicals Ltd. 2011 (22) S.T.R. 610 (Guj), wherein the Hon’ble Gujarat High Court had analysed various decisions and had held that if providing residential quarters and security services was voluntary, the activities were not covered within the definition of input services and therefore, the CENVAT Credit was not available. Relying on this, the CENVAT was not allowed as not in relation to business.

Download PDF

You May Also Like

Stainless Steel vis-à-vis Rate of Tax Under MVAT Act, 2002

2014 (33) STR 609 (All) A C L Education Centre (P) Ltd vs. UOI