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Classification of input services cannot be changed by service recipient for availing CENVAT credit on input services. Further, works contract for repairs, renovation and modernization of the premises are not eligible for CENVAT credit.
Facts
Appellant availed CENVAT credit on services of repairs, renovation and modernization of the premises classified as “works contract service” by service provider. Works contract services are specifically excluded from the definition of “input services”. The Appellant challenged denial of CENVAT credit on the grounds that the services for renovation and modernization of the premises were specifically covered in the inclusion clause of the definition of “input services”.
Held
There cannot be different yardstick for the purpose of classification of service at the service provider’s and service recipient’s end. In other words, classification of service cannot be disputed at service recipient’s end. Works contract service is not one service but a bunch of various activities like renovation, repairs, construction, erection, installation where the material is also involved during the course of provision of service. If renovation and modernization services are provided and classified individually, they shall be eligible for credit. However, if these services are provided as bunch under works contract, they shall not be considered as input services. If CENVAT credit is allowed on the basis of nature of service by claiming that services were for renovation and modernization of premises, it would make exclusion clause of input service redundant. Accordingly, CENVAT credit was denied.
