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CENVAT credit of service tax paid on construction services used for
construction of hostel/quarters for employees being in relation to
manufacturing business is admissible.
Facts:
The
Appellant is a manufacturer having a factory in a small town with meagre
transport facilities and other infrastructure. The Adjudicating
authority denied credit of service tax paid on construction services
used for construction of hostels/ quarters made for employees alleging
suppression and invoking extended period of limitation.
Held:
The
Tribunal considering the definition of input service provided under
Rule 2(l) of the CENVAT Credit Rules, 2004 held that construction of
hostels/quarters for employees being in relation to manufacturing
business is allowable as CENVAT credit. The Tribunal also noted that
since the show cause notice was issued after two and a half years of
taking the credit, the same was barred by limitation. Moreover, since
the credit availed was disclosed in the EA-3 returns, there was no
suppression and accordingly extended period was not invokable.
