CESTAT Allows Cenvat Credit Of Service Tax Paid On Services Of Toilets Located In Port User Building

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed the CENVAT credit of service tax paid on services of toilets located in port-user buildings.The bench of Anil G. Shakkarwar (Technical Member) has observed that the territorial location cannot decide the admissibility of CENVAT credit under the provisions of Rule 2(l) of the CENVAT Credit Rules, 2004. The department has failed to establish that the services used in port user buildings are not used for providing output services.The appellants/assessee are providing port services and also providing toilet facilities to the users of those services. Service tax is paid on the maintenance of toilets, and the credit for the same is taken for the discharge of service tax on port services.The dispute is whether the service tax paid on service charges for toilets located in port-user buildings and residential buildings is admissible or not.The proceedings at the original and appellate levels have denied the appellants Service Tax credit on the account.The appellant had submitted that they are convinced that the residential area does not provide any business activity, and therefore they have stopped taking CENVAT credit for service tax paid on toilet maintenance in the residential area.The appellant also stated that CENVAT credit related to residential buildings involved in the appeal has been reversed by them. The appellant has submitted that the service tax paid on the servicing of toilets in the port user area is denied to them by the adjudicating authority, stating that the building is outside the port area. The location of the port user area is irrelevant, and it is to be examined whether the port user building is used for business activity for providing output services.The tribunal, while allowing the appeal, held that the input service should be used for providing output services to be eligible for CENVAT credit.Case Title: M/s Jawaharlal Neharu Port Trust Versus Commissioner of Central Tax - RaigadCitation: Service Tax Appeal No. 85484 of 2020Date: 20.02.2023Counsel For Appellant: Mehul JivaniCounsel For Respondent: Vinod KumarClick Here To Read The Order

CESTAT Allows Cenvat Credit Of Service Tax Paid On Services Of Toilets Located In Port User Building

Mariya Paliwala

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