2014 (2) TMI 1187 - AT - Service Tax

Denial of CENVAT Credit - construction services - Held that - Service provider had rendered the services to appellant in respect of the activities as mentioned hereinabove on the construction/erection temporary storage/godowns were during the initial period when the factory premises of the appellant was being set up and also subsequently. - If the temporary shed which has been constructed is within the factory premises and admittedly being used for storing of cement and steel it would be only for any one of the activities as is mentioned in the definition. In my view the definition under Rule 2(l) allow for credit of such an amount paid as Service Tax. - Decided in favour of assessee.

Summary

Issues involved:
Eligibility to avail Cenvat credit of Service Tax paid on construction services for fabrication/erection, labour charges of temporary storage shed, cutting of shrubs, vegetation, etc.

Analysis:
The appeal was against OIA No. SA/39/VAPI/2011, dated 10-5-2011. The issue revolved around the eligibility to claim Cenvat credit for Service Tax paid on various services related to construction activities. The lower authorities had denied the credit, stating that the services were not input services. The appellant argued that the definition of "input services" in Rule 2(l) of the Cenvat Credit Rules, 2004 encompassed the services in question.

Upon reviewing the records, it was established that the service provider had indeed rendered the services to the appellant for construction/erection activities, temporary storage, and other related tasks during the factory setup phase. The definition of "input services" in Rule 2(l) includes services used in setting up, modernization, renovation, or repair of factory premises. If the temporary shed constructed was within the factory premises and used for storing materials, it fell within the definition. Therefore, the payment of Service Tax on such services was eligible for credit under the rules.

Consequently, the Tribunal found the lower order unsustainable and set it aside. The appeal was allowed, providing consequential relief if applicable. The judgment was pronounced on 7-2-2014 by Shri M.V. Ravindran, Member (J) of the Appellate Tribunal CESTAT AHMEDABAD.