2009 (4) TMI 577 - AT - Central Excise

Cenvat/Modvat - Input service - repairs and maintenance service - garden maintenance service - Rule 2(l) of the Cenvat Credit Rules, 2004

Summary

Issues:
1. Disallowance of Cenvat credit on repairs and maintenance service and garden maintenance service.
2. Imposition of penalty on the assessee.
3. Qualification of services as 'input services' under Rule 2(l) of the Cenvat Credit Rules, 2004.

Analysis:
1. The appellants had availed Cenvat credit on repairs and maintenance service and garden maintenance service. The Assistant Commissioner proposed to disallow the credit and impose a penalty. The original authority denied the credit and imposed a penalty, which was upheld by the Commissioner (Appeals), leading to the present appeal by the assessee.

2. The main issue for consideration was whether the services qualified as 'input services' under Rule 2(l) of the Cenvat Credit Rules, 2004. The authorities found no evidence of repairs and maintenance service being used for business activities. Regarding garden maintenance service, it was held that it did not qualify as an 'input service' related to the manufacture or clearance of goods. The SDR pointed out that only garden maintenance service was mentioned in the show-cause notice, but both services were addressed by the authorities.

3. The Tribunal found that garden maintenance service had no connection to the manufacture or clearance of goods, thus not qualifying as an 'input service.' The issue of repairs and maintenance service was not explicitly covered in the show-cause notice. The Tribunal remanded the case to the original authority to verify if the dispute included repairs and maintenance of vehicles, giving the assessee a chance to prove the usage of vehicles in relation to the manufacture or clearance of goods.

4. The appeal was allowed for the limited purpose of further adjudication on the repairs and maintenance service issue. The original authority was instructed to examine the records thoroughly and provide the assessee with a reasonable opportunity to present their case. The Tribunal emphasized the importance of due process and the right to be heard in such matters.