2026-VIL-1268-CESTAT-MUM-ST
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SERVICE TAX CESTAT Cases

Service Tax - Eligibility to CENVAT credit on input service for repair and maintenance of studio buildings - Appellant availed CENVAT credit on service tax paid for RCC column strengthening and repair and maintenance charges of studio buildings – Disallowance of credit on the ground that such services were covered under exclusion clause of Rule 2(k) and Rule 2(l) of CENVAT Credit Rules, 2004 - Whether repair and maintenance services for existing infrastructure constitute input service eligible for CENVAT credit - HELD - The disputed services relating to repair and maintenance of existing studio and audio recording buildings from where output services are provided are covered under the phrase "modernisation, renovation or repairs of a premises of provider of output service" mentioned in the inclusion clause under Rule 2(l) of CENVAT Credit Rules, 2004 – The Rule 2(k) which provides definition of input goods is not relevant for examination of service tax paid on service portion in execution of works contract. Plain reading of Rule 2(l) shows that input service falls within means part covering services used directly or indirectly for provision of output service and inclusion part specifically stating certain services used in various activities. The repair and maintenance services fall within means and inclusion part and are not covered under exclusion part therefore there is no legal basis for denial of CENVAT credit – Further, in Rule 2(k) the service portion of the works contract is excluded as exception, and this cannot be construed as being excluded from the definition of ‘input. The grounds for rejection of input service credit on basis of Rule 2(k) are not legally sustainable and not justified - The impugned order is set aside and CENVAT credit for repair and maintenance charges is allowed – The impugned order is set aside to the extent it had denied CENVAT Credit in respect of repair and maintenance. The penalty imposed on the appellants is also set aside – The appeal is allowed
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