Cenvat credit on services linked to renting of immovable property can qualify as input services at the prima facie stage.

Services integrally connected with the business of renting immovable property may, at the prima facie stage, qualify as input services for Cenvat credit where the services include telecommunication, security, and maintenance and repair. The circular relied on for denial, which dealt with commercial or industrial construction and works contract services used during construction of immovable property, was held inapplicable to these facts. On that basis, the appellant made out a prima facie case for waiver of pre-deposit, and unconditional stay against recovery was granted pending appeal.

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Issues: Whether the appellant made out a prima facie case for waiver of pre-deposit and stay against recovery in relation to Cenvat credit on services used for renting of immovable property.

Analysis: The denial of credit was based on a circular dealing with commercial or industrial construction service and works contract service used during construction of immovable property. That circular was held to be inapplicable to the present case, which concerned telecommunication, security, and maintenance and repair services connected with the rented immovable property. It was noted that, depending on the terms of the agreement, such services could be treated as input services for the business of renting, and maintenance and repairs were specifically referred to within the broader understanding of input service.

Conclusion: The appellant established a prima facie case for Cenvat credit eligibility at the stay stage, and the requirement of pre-deposit was waived with unconditional stay granted against recovery during pendency of the appeal.

Ratio Decidendi: Services integrally connected with the business activity of renting of immovable property may, at the prima facie stage, qualify as input services for purposes of Cenvat credit, especially where the relied-upon circular is inapplicable to the facts.

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