CESTAT allows Cenvat Credit of Service Tax paid on Services of Toilets in Port User Building [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Mumbai Bench allowed Cenvat Credit of Service Tax paid on services of Toilets located in Port User Building.

The appellants, M/s Jawaharlal Neharu Port Trust, are providing port services and also providing facility of toilets to the users of port services. Service Tax is paid on maintenance of toilets and the credit of same is taken for discharge of Service Tax on port services. The dispute is whether the Service Tax paid on service charges of toilets located in port user building and residential building is admissible or not.

The proceedings at original and appellate have denied the appellants Service Tax credit on the said account. The said Service Tax paid on servicing of toilets in port user area was denied to them by the Adjudicating Authority stating that the said building is outside the port area.

The Counsel for the appellant, contended that they are convinced that the residential area does not provide any business activity and therefore they have stopped taking CENVAT Credit of Service Tax paid on maintenance of toilets in the residential area. The Learned Counsel for the appellant also stated that CENVAT Credit related to residential building involved in this appeal has been reversed by them.

The Counsel further contended that that the location of port user area is irrelevant and it is to be examined whether the port user building is used for business activity for providing output service.

The Authorized Representative relied on the impugned order.

The issue is covered by the definition of input service as defined under Rule 2(l) of CENVAT Credit Rules, 2004. The general understanding emerges from the reading of the said rule is that the input service should be used for providing output service to be eligible for CENVAT Credit.

The Tribunal of Anil G. Shakkarwar, Member (Technical) observed that “The Revenue has not established that the services used in port user building are not used for providing output service. Therefore, I hold that the CENVAT Credit of Service Tax paid on services of toilets located in port user building is admissible to the appellants.”

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