CENVAT credit on repair, renovation and motor vehicle services remains admissible under the input service definition.

Services used for repair, renovation and modernization of a provider's premises remain covered as input services under Rule 2(l) of the CENVAT Credit Rules, 2004, because the definition expressly includes such premises-related works and the 2011 exclusion clause does not remove them. The Board's 29.4.2011 circular also supports credit for repair or renovation of a factory or office. Renting of motor vehicles was treated as credit-eligible on the basis of settled Tribunal decisions, and servicing of motor vehicles was held outside the exclusion in Rule 2(l)(B). CENVAT credit on the disputed services was therefore not liable to be denied.

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Issues: Whether CENVAT credit was admissible on services used for repair, renovation, modernization and related works of the premises of the output service provider, including renting of motor vehicles and servicing of motor vehicles, under the definition of input service in Rule 2(l) of the CENVAT Credit Rules, 2004.

Analysis: The disputed services were found to relate to repair and renovation of the appellant's premises used for providing output services. The definition of input service specifically includes services used for modernization, renovation or repairs of premises of the provider of output service, and the 2011 exclusion clause did not take such repair or renovation services outside the definition. The Board's circular dated 29.4.2011 also clarified that credit of input services used for repair or renovation of a factory or office is allowed. The denial of credit on renting of motor vehicles was held unsustainable in view of settled Tribunal decisions, and servicing of motor vehicles was also found not to fall within the exclusion under Rule 2(l)(B).

Conclusion: The denial of CENVAT credit was not sustainable. The input services were held to qualify as input services, and the appellant was entitled to credit.

Ratio Decidendi: Services used for repair, renovation and modernization of the premises of a service provider remain eligible input services under Rule 2(l), and a circular clarifying allowance of such credit cannot be overridden by an expansive reading of the exclusion clause.

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