The Customs, Excise and Services Tax Appeals Tribunal (CESTAT), Chennai ruled that the soft drink manufacturers, Hindustan Coca-Cola, were eligible for cenvat credit on pest control services.
The appellants, Hindustan Coca-Cola Beverages Pvt. Ltd, specializing in the manufacture of soft drinks and fruit juices, benefited from the CENVAT credit on inputs and input services. Authorities refused credit on the pest control services available to the appellant to control pests in said Godown.
The appellants argued that it is highly necessary to keep the down pest free, as sugar is used as an input for finished products intended for human consumption and, therefore, the credit is eligible.
On appeal, the Tribunal ruled that “the appellant took up the rental premises outside the factory to store the inputs, namely the sugar. The appellant used pest control services to make these premises pest free. As the product stored by the appellant is sugar and is used as an input for carbonated beverages intended for human consumption, it is essential that the premises be free from pests. For this reason, I am of the opinion that the pest control services relied on by the appellant are input services and therefore qualify for the credit. The denial of credit is unwarranted and must be canceled, which I hereby do.
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