Telephone services at residence of workers are input services

CESTAT, AHMEDABAD BENCH

Bank of India

Versus

Commissioner of Service Tax, Ahmedabad

ORDER NO. A/1117/WZB/Ahd of 2012

APPEAL NO. ST/115 OF 2011

JULY 20, 2012

ORDER

1. The appellants are in appeal against the decision of denial of refund of cenvat credit paid on service tax paid on construction services, security services and maintenance of garden in respect of residential colony of the employees and service tax paid in respect of telephone services installed in the residence of officers reversed by them on the basis of audit objection.

2. Heard both sides.

3. I find that the refund claim had been rejected by relying upon the decision of the Hon’ble Supreme Court in the case of Maruti Suzuki Ltd. v. CCE [2009] 22 STT 54. However, I find that the decision of Maruti Suzuki Ltd. (supra) was in respect of inputs and not in respect of service. As regards input services even though the appellant cited some Tribunal decisions in support of their case, I find that the issue of availability of cenvat credit in respect of maintenance, civil construction and security services in respect of residential colony had been considered by the Hon’ble High Court of Bombay in the case of CCE v. Manikgarh Cement [2010] 29 STT 230 and by the Hon’ble High Court of Gujarat in the case of CCE&C v. Gujarat Heavy Chemicals Ltd. [2012] 34 STT 587 and in both the cases the decision was that such provision of service is welfare activity and therefore service tax credit as claimed in respect of such services other than telephone services in respect of telephone installed in the residential colony of the employees is not admissible. As regards telephone service, I find that the decision of the Tribunal in the case of ITC Ltd. v. CC&E [2009] 20 STT 110 (Chennai – CESTAT) took a view that such credit is admissible. In the absence of any contrary decision, I follow the same and hold that the appellants are eligible for credit of service tax paid on telephone services in respect of telephone installed in the residence of employees.

4. Therefore the impugned order is set aside and the matter is remanded to the original adjudicating authority for sanction of refund admissible in terms of the observations made above.

NF