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2021 (7) TMI 1383 - AT - Central ExciseCENVAT Credit - input services or not - services relating to civil work, erection of steel structure, gate fixing, fixing of pipe railing, zeena (stair case), fabrication work and shed fabrication work - whether work were in the nature of works contract services/construction services and is excluded from the purview of definition of input service under Rule 2(l) of the CENVAT Credit Rules, 2004 or not? - non-speaking order - non-application of mind - extended period of limitation - HELD THAT - The appellant has carried out repair and maintenance work. There is no specific disallowance under Rule 2 (l) with respect to repair and maintenance work. The specific disallowance is only with respect to the new construction undertaken by the assessee. The appellant is entitled to cenvat credit on repair and maintenance services received for repair and maintenance of plant and machinery, in the factory premises - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Eligibility of CENVAT credit on services related to civil work, erection of steel structures, and other construction activities. 2. Invocation of extended period of limitation under Section 11A(4) of the Central Excise Act, 1944. 3. Imposition of penalty and interest. 4. Adequacy of the Show Cause Notice (SCN) and the Orders passed by the lower authorities. Issue-wise Detailed Analysis: 1. Eligibility of CENVAT Credit: The primary issue was whether the Appellant was entitled to CENVAT credit on services related to civil work, erection of steel structures, gate fixing, fixing of pipe railing, zeena fabrication work, and shed fabrication work. The Revenue contended that these services were ineligible under Rule 2(l) of the CENVAT Credit Rules, 2004, as they were in the nature of construction services. The Appellant argued that these services fell under the "means" clause of the definition of input service, which includes services used "in or in relation to the manufacture of final products." The Appellant submitted that the services in question were related to repair and maintenance of the factory, which is covered under the inclusive part of the definition of input service. The Appellant relied on various case laws and CBEC Circular No. 943/4/2011-CX dated 29.04.2011 to substantiate their claim. The Tribunal found that the services availed by the Appellant were indeed related to repair and maintenance work and not new construction. Therefore, the Tribunal held that the Appellant was entitled to CENVAT credit on these services. 2. Invocation of Extended Period of Limitation: The Revenue invoked the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944, alleging that the Appellant had intentionally suppressed the availment of irregular credit with an intention to evade payment of duty. The Appellant contended that there was no suppression of facts as they had duly filed their ER-1 returns showing the details of CENVAT credit availed. The Tribunal agreed with the Appellant, noting that the returns did not require listing the specific services on which credit was taken. Therefore, the Tribunal held that the extended period of limitation was not invocable. 3. Imposition of Penalty and Interest: The lower authorities had imposed an equal penalty on the Appellant and demanded interest on the allegedly inadmissible CENVAT credit. The Tribunal, having found that the credit was admissible and the extended period of limitation was not invocable, held that the imposition of penalty and demand for interest were unjustified. Consequently, the Tribunal set aside the penalty and interest. 4. Adequacy of the Show Cause Notice (SCN) and Orders: The Appellant argued that the SCN was vague and did not provide specific allegations, thereby denying them a proper opportunity to rebut the same. The Tribunal noted that the SCN was issued without examining the nature and use of the subject services and that the lower authorities had merely reiterated the findings without considering the Appellant's submissions and relevant case laws. The Tribunal found that the orders passed by the lower authorities were non-speaking and demonstrated non-application of mind. Therefore, the Tribunal set aside the impugned orders on this ground as well. Conclusion: The Tribunal concluded that the Appellant was entitled to CENVAT credit on the services related to repair and maintenance of the factory. The extended period of limitation was not invocable, and the imposition of penalty and interest was unjustified. Consequently, the Tribunal set aside the impugned orders and allowed the appeal with consequential relief to the Appellant.
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