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August 2014

2014 (34) STR 596 (Tri-Del.) Jenson & Nicholson (India) Ltd. vs. CCE., Noida

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Whether financial services of techno-economic feasibility of rehabilitation and modalities of finance, are eligible input service? Held, Yes.

Facts:
The appellants manufacturers of paints and varnishes had various factories. The appellants, being a sick company applied to BIFR for finalising rehabilitation package and in the process availed services of techno feasibility study of rehabilitation and obtained report on further fund raising. The appellants took CENVAT Credit on such services which was denied by revenue authorities.

The appellants contested that the services were obtained in view of order of BIFR and the same were financial services covered very well within the definition of input services. In any case, these services were “activities relating to business” specifically covered under the definition of input services.

Held:
In terms of BIFR’s orders, the appellants availed such services with respect to techno-economic feasibility of rehabilitation and modalities of finance. Without such feasibility report, it was not possible for BIFR to finalise the rehabilitation package for the appellants. Therefore, such services had nexus with its manufacturing activity and are covered within the term “activities relating to business” and therefore, CENVAT Credit was allowed to the appellants.

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