Order Date: 07 November 2022

Facts:

• The appellant, M/s. Indian Additives Limited, is engaged in the manufacture of “Lubricating Oil Additive s”and is registered with the Department. 
• The appellant availed credit on computer server, as capital goods, installed at their Mumbai office. 50% of the CENVAT Credit of Rs.19,463/- on duty paid on the computer server was availed in the month of October 2015 and the remaining 50% of the credit of Rs.19,463/- was availed by them in the month of May 2017.
• The total credit availed on the computer server, as capital goods, was Rs.38,926/-
• Further, for the period from 2014-15 and 2017-18 (up to June), the appellant availed CENVAT Credit of the Service Tax paid on Housekeeping Services amounting to Rs.16,068/- which is received and utilized by the appellant at their office premises in Mumbai. 
• Show Cause Notice No. dated 25.07.2019 was issued proposing to disallow the said ineligible credit and recover the same along with interest, and penalties. 
• Against the order, the appellant filed appeal before the Commissioner (Appeals), who vide order impugned herein upheld the same. Hence, this appeal.

Issue:

• Whether the appellant is eligible to avail the credit on capital goods after 01.04.2016 as well as the credit on Housekeeping Services ?

Order:

• The authorities observed that the definition of “capital goods” after 01.04.2016 does not exclude ‘any equipment or appliance used in an office’. For this reason, the Tribunal held that the credit availed by the appellant on the said computer server after 01.04.2016 would be eligible.
• In regard to Housekeeping Services, the credit availed by the appellant has been disallowed alleging that these services are consumed in the Mumbai office. It is not in dispute that the Mumbai office is an integral part of the business of the appellant and is doing the administrative work in respect of the appellant’s factory. For this reason, the Tribunal held that the credit availed by the appellant on Housekeeping Services at their Mumbai office is eligible.
• Further, the issue being an interpretational one and the appellant having been eligible to avail the credit on the said capital goods as well as the credit on Housekeeping Services, hence penalty was set aside.